Home sales dip in October as market cools since hot summer
Last month, Canadian home resales dipped for the first time since February, and many see this as a signal that a so-called correction in the housing market remains in place. The Canadian Real Estate Association reported Friday that the number of transactions fell 3.2 per cent in October from September on a seasonally adjusted basis. That still leaves an 8.3 per cent increase from October 2012, when sales were dipping following to a tightening of federal mortgage rules in July of that year. Analysts say the monthly results, while only a snapshot, suggest that the underlying market is soft and that fears of a bubble, voiced during the summer’s strong housing rally, were exaggerated. October’s month-over-month dip can also be evidence that the recent sales spurt came largely from homebuyers with pre-approved mortgages jumping into the market before rates headed higher. Some analysts believe with prices so high, Canada may be due for a sharp correction in prices. However, that scenario has yet to materialize. Soft-landing proponents argue that the two markets are very different because regulations in Canada require a greater degree of equity held by homeowners, high-leverage purchases must be insured, and financial institutions are more prudent in their lending practices.
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References:
http://www.ctvnews.ca/business/home-sales-dip-in-october-as-market-cools-since-hot-summer-1.1544674