Low Borrowing Costs Lure Home Buyers
Low borrowing costs lure home buyers
Existing home sales rose slightly in November as continued low borrowing costs pushed housing closer to seller's market territory, the Canadian Real Estate Association said Thursday.
On a seasonally adjusted basis, sales were up 0.5 per cent in November over October -the third straight monthly gain -and were also ahead of last year's levels, though overall sales were in line with the 10-year average, CREA said.
"Despite numerous headwinds - slower job growth, softer consumer confidence, tighter mort-gage rules, elevated household debt and high valuations - buyers simply couldn't resist the lure of cheap borrowing costs - especially given the benign rate out-look," Sal Guatieri, senior economist with BMO Capital Markets, said in a note.
While sales rose in about 60 per cent of local markets, the Halifax-Dartmouth region of Nova Scotia accounted for much November's numbers, with sales rising by 41.5 per cent, the largest single monthly gain for the region since February 1992, according to Francis Fong, an economist with TD Economics. Rising sales there more than offset a 3.3-per-cent decline in Toronto.
To November, there were 432,048 houses sold through the Canadian MLS systems in 2011, CREA said, a 2.1-per-cent gain from the same period in 2010. The average sale price in November was $360,396, a year-over-year increase of 4.6 per cent, which CREA says is the smallest increase since January.
November's new listings fell 3.4 per cent from the previous month, down in more than two-thirds of Canada's housing markets, CREA said, led by Toronto, the Hamilton-Burlington area of Ontario and Calgary.
Analysts are expecting the nation-al housing market to moderate in 2012, with a weak first half followed by a stronger six months.