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National home sales in September were 15.1 percent below a year ago, with more than half of the country's local markets down by at least 10 percent.
But, adjusting the numbers for seasonal trends, September's sales edged up 2.5 percent from August, the Canadian Real Estate Association (CREA) said Monday. That marks the first monthly increase since March.
Even Greater Vancouver showed a month-over-month rise in sales on a seasonally-adjusted basis, the association said.
According to the Real Estate Board of Greater Vancouver, there were 1,516 sales in September, down 8.1 percent from the 1,649 sales in August. But sales tend to peak in spring and can often fall in September. CREA's figures, which seek to account for those seasonal variations, suggest that on an adjusted basis there were the equivalent of 1,903 sales in Greater Vancouver in September, compared to 1,827 in August, a rise of 4.2 percent.
While that suggests that last month's sales were perhaps not as dire as some people were anticipating, it still shows that the mortgage insurance rule changes that Jim Flaherty announced in July are cooling the market, with sales continuing to trend lower than year-ago levels, CREA chief economist Gregory Klump said in an interview.
"The recent mortgage insurance changes are working, it is cooling the market and sales have ratcheted down compared to a year ago," he said. "We do anticipate that sales are going to remain below year-ago levels for the rest of the year and maybe even into the spring."
On a seasonally-adjusted basis, September's sales were higher than August in about 60 percent of the Canadian markets that CREA gathers data from, including Calgary, Edmonton, Greater Toronto and Quebec City, the association said.
The national average price for homes sold in September was $355,777, up 1.1 percent from a year ago. Excluding Vancouver the average price of a house sold rose 3.4 percent.
The MLS Home Price Index, which seeks to present a more apples-to-apples comparison of prices and to account for any changes in the mix of sales, rose 3.9 percent year-over-year, CREA said. "This was the fifth time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase since May 2011," it said.
"The Canadian housing market has clearly lost some of its lustre," Toronto-Dominion Bank economist Francis Fong wrote in a research note after the data was released. "Sales have fallen from their peaks in most markets across the country with today's gain only partially offsetting August's substantial decline."
The 2.5-percent month-over-month rebound in seasonally-adjusted sales in September follows a 6.2-percent decline in August (that figure was downwardly revised).
"That being said, with interest rates remaining sufficiently accommodative, we do not anticipate any precipitous decline in housing activity in the near term," Fong said.
"Rather, we expect a gradual unwinding of the imbalance in both sales and prices over the next few years. Moreover, the bulk of the correction will be concentrated in markets we feel are particularly overvalued, such as Toronto and Vancouver."
Fong also noted that listings have rebounded, rising by 6.5 percent after significant declines in the previous two months. "The sales-to-new-listings ratio remained well-entrenched in balanced market conditions at 0.49," he wrote.