Montreal leads record Canada home sales as Vancouver eases

Canadian home sales rose 1.5 percent to a fresh record in March, with the source of strength shifting to Montreal while a longer boom in Vancouver and Toronto eased.

Existing home sales climbed 2.6 percent from a month earlier in Montreal, while Toronto and Vancouver saw declines of 1.8 percent and 0.3 percent respectively, the Canadian Real Estate Association said Friday in Ottawa. National sales rose 12 percent from a year earlier, including a 28 percent increase for Vancouver and a 16 percent rise in Toronto.

Housing gains fed by the lowest mortgage rates in decades have propped up Canada’s economy as business spending is held back by weak U.S. demand and a plunge in commodity prices. Policymakers have expressed concern that the surge in Vancouver and Toronto leaves those markets vulnerable to a correction.

The benchmark home resale price rose 9 percent to C$528,200 ($410,000) in March from a year earlier, and the average Vancouver price is up 23 percent to C$815,000.

Inventories of houses fell to five months worth of sales, with the lowest ratio in six years reflecting “increasingly tighter houses in British Columbia and Ontario,” CREA said in its sales report.

“We expect Canadian home price growth to slow to below 3 percent year over year this year, but prices in Toronto and Vancouver should continue to grow well above that pace,” Warren Kirkland of TD Economics said Friday.

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