Canada Existing Home Sales Drop 5.6% in October

By Paul Vieira

OTTAWA--Existing home sales in Canada dropped 5.6% in October, a fourth-consecutive month-over-month decline, as higher interest rates continue to weigh on consumption.

On an unadjusted basis, transactions in October were 0.9% below sales from the same year-ago period, according to data from the Canadian Real Estate Association.

The data underscore the cooling in Canada's economic activity, the result of a yearlong-plus rate-raising campaign from the Bank of Canada that lifted borrowing costs to a 22-year high. The deceleration is particularly pronounced in the housing market, which was a key engine for growth after the peak of the pandemic, as consumers took advantage of near-zero interest rates.

October's drop in sales is the steepest fall since June, 2022, when sales declined 6.4%.

"It appears many would-be home buyers have already gone into hibernation, " said Larry Cerqua, chairman of the real-estate association.

John Pasalis, head of Toronto real-estate brokerage Realosophy, said sales of detached homes in Toronto fell to their lowest level on record in October.

The national data indicated benchmark house prices--calculated in a similar fashion to the S&P CoreLogic Case-Shiller National Home Price Index--fell 0.8% in October from the previous month, although were up 1.1% from a year ago. On a three- and five-year basis, prices rose 26% and 28%, respectively.

The number of newly listed homes fell 2.3% on a month-over-month basis in October, the first decline since March. As a result, the sales-to-new listings ratio fell to a 10-year low of 49.5%. The long-term average for this measure is 55.1%, and the gauge recently climbed as high as 67.9% in April.

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(END) Dow Jones Newswires

11-15-23 0941ET