UPDATE 1-Canada January home resales dip from December

* Home resales in January slip 2.8 percent from December

* Sales up 58 percent from year-earlier level

* Average price rises to C$328,537

By Ka Yan Ng

TORONTO, Feb 17 (BestGrowthStock) – Sales of existing homes in
Canada cooled in January from December’s level, but they surged
on a year-over-year basis, suggesting the housing sector is
still a major factor in the country’s economic recovery.

A total of 43,910 homes changed hands in January, down 2.8
percent from December, the Canadian Real Estate Association
said on Wednesday. But sales were up 58 percent from January
2009, when the market hit bottom in the wake of the global
financial crisis.

Economists warned that year-over-year comparisons are
likely to shrink in coming months because the recovery of the
housing market started in February 2009.

Encouraged by low interest rates and rising consumer
confidence, the average national resale house price rose 5
percent to C$320,333 in 2009. Year-over-year price comparisons
were often in double digits, skewed higher because of
rebounding activity in some of the more expensive markets.

The real estate association said the national average price
in January rose 19.6 percent from a year earlier to C$328,537

The dip in sales from December is unlikely to quiet debate
about whether there is a housing bubble in Canada. Analysts
said there may be a fresh buying frenzy ahead of interest rate
hikes expected later this year and the implementation of
tougher mortgage rules outlined by the government on Tuesday.

“On the whole, the report suggests that while the Canadian
housing market remains quite buoyant, sales activity moderated
somewhat in January,” said Millan Mulraine, economics
strategist at TD Securities.

“This respite, however, is unlikely to last long, as we
expect sales activity to pick up significantly in the next few
months as home buyers that will be affected by yesterday’s
announced regulatory changes rush to get ahead of the April 19
deadline for the new measures to be put in pace.”

The federal government said on Tuesday its tweaking of
mortgage rules will help calm the country’s hot housing sector,
citing the need to prevent a property price bubble.

New listings rose in January for a fourth straight month,
up 0.3 percent from December.

Sales eased in most provinces, with the exception of Quebec
and some Atlantic provinces. CREA said Ontario accounted for
about half the national decline.

Stock Market Analysis

($1=$1.04 Canadian)
(Reporting by Ka Yan Ng; editing by Peter Galloway)

UPDATE 1-Canada January home resales dip from December