Home Sales in Canada drop down to 7-year low comparative to April

Home Sales in Canada got dropped down in April to 7-year low for a month, kickoff to the busiest real estate season, as both prices and sales saw double digit annual decline, Canadian Real Estate Association reported on Tuesday.

Home Sales sank by 13.9% over a year and national average sale price of a home dropped down by 11.3% to just more than $495,000.

But all these exclude large decline in pricey Toronto and Vancouver markets, national average home price was down by 4.1% to around $386,100.

Home Sales too fell down by 2.9% between March and April, which brought total number of home sales around 36,297.

Listings with CREA members fell down by 4.8% to around 67,616, it is a 9-year low for a month and a sign which is the flurry of activities which kicks off spring real estate market that didn’t materialize during April.

A large decline in the new listings helped to keep 60% of local real estate markets in a balance between sellers and buyers.

An organization that represents around 100,000 real-estate agents across Canada blamed new mortgage stress test which came into an effect at the beginning of this present year for majority of a drop.

It has been very critical of the government intervention in the housing market at both the provincial and federal levels.

Gregory Klump, a Chief Economist at CREA said that new stress test has lowered down home sales activity and destabilized balance in real estate market of regions where home sales were already too weak, including Newfoundland and Labrador, Saskatchewan and Alberta.

“It is exactly like the type of damage which CREA has warned what the government is about. As the provinces whose economic prospects faced number of difficulties because they all have been closely tied to the natural resources,it is too puzzling that government describe effects of all of its new policies have been intended consequences.”