By Robb M. Stewart
OTTAWA--Home resales in Canada ended the year on a downbeat note, faltering after gains the previous two months with a jump in supply in the early fall.
National sales of existing homes dropped 5.8% in December from the previous month, though that remains roughly 13% above where sales were in May, the Canadian Real Estate Association said Wednesday. Activity on a nonadjusted basis was about 19% above year-earlier levels.
The monthly decline was sharper than the 2.2% fall economists expected, according to TD Securities.
The data builds on early figures from local real estate board that showed a mixed finish to 2024 for major housing markets as resale transactions fell in Toronto and Calgary, Alberta, but continued to recover in Vancouver and the Fraser Valley in British Columbia.
"Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts," Shaun Cathcart, CREA's senior economist, said.
Sales over the fourth quarter of 2024 were up 10% on the prior quarter and the association said it was among the stronger quarters for activity in the last 20 years, excluding the peak pandemic years.
New listings slipped 1.7% in December from the month before, marking a third straight monthly decline following a jump in new supply in September.
The association's data indicated that benchmark house prices, calculated in a similar fashion to the S&P CoreLogic Case-Shiller National Home Price Index, advanced 0.3% from the prior month. That marked a second consecutive monthly increase.
The average price nationally stood at 676,640 Canadian dollars ($471,550), not seasonally adjusted, up 2.5% on a year earlier.
Five successive interest rate cuts by the Bank of Canada since June, lowering the central bank's policy rate 1.75 percentage point in all, is expected to breath life back into Canada's sluggish housing market. Economists widely expect further rate cuts early this year in an effort to prevent inflation from dropping too sharply and amid political and trade uncertainty in North America, though Bank of Canada policymakers have signaled a pivot to a more gradual approach toward monetary policy after a second outsize cut in December.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
01-15-25 0939ET