UPDATE 2-Canada home resales cool for 2nd straight month

* February home resales slide 1.5 pct from January

* Resales up 44 pct from year earlier

* Olympics may have stalled sales in British Columbia

* Average price rises 18.2 pct from year ago to C$335,655

* Finance minister says data going in “right direction”
(Adds finance minister, economist’s comments)

By Ka Yan Ng

TORONTO, March 15 (BestGrowthStock) – Sales of existing homes in
Canada dipped for a second straight month in February, but
remained high on a year-over-year basis, as the market may be
moving into more balanced conditions, data showed on Monday.

The Canadian Real Estate Association (CREA) said a total of
42,799 homes changed hands last month, down 1.5 percent from
January, as a large gain in sales in Toronto were offset by
declines in Vancouver and other British Columbia housing

The report was welcomed by Finance Minister Jim Flaherty,
who said the country’s cooler home resales data was headed in
the “right direction.” He also repeated that there is no
evidence of a housing market bubble in Canada. [ID:nN15205212]

Across Canada, sales rose 44 percent from the same month
last year, a smaller gain in national activity from the
previous three months. This was in line with economists’ views
that year-over-year comparisons are likely to shrink in coming
months because the recovery of the housing market started in
February 2009.

After a relatively short spell of low consumer confidence
during the global financial crisis, Canadian homebuyers quickly
returned to the market, taking advantage of record low interest
rates, and made the housing sector one of the cornerstones of
the domestic economic recovery. The overall pace of the rebound
in the past 12 months has encouraged debate about a housing

“Looking beyond the buoyant year-on-year gains in sales and
prices, most of the underlying statistics reveal that the
broader housing market is beginning to simmer down after last
year’s amazing turnaround,” said Doug Porter, deputy chief
economist at BMO Capital Markets.

“It appears that the housing market will pull up just short
of bubble territory.”

Buyers looking to get into the market before interest rates
likely start rising this year, and ahead of new mortgage rules
in April, could also contribute to a burst of sales before the
sector cools in the second half of the year. [ID:nN18184642]

“We should see the Canadian housing market move slowly back
into a balanced-market position as higher mortgage rates and
prices begin to temper demand,” said Millan Mulraine, economics
strategist at TD Securities.

Also, rising supply — new listings rose for a fifth
straight month, up 2.4 percent — could take the steam out of
the housing markets as the year progresses, said Gregory
Klump,” CREA’s chief economist..

CREA said the national average home price in February rose
18.2 percent from a year earlier to C$335,655 ($329,074).

The Winter Olympics, which were held in the host city of
Vancouver and nearby areas, may have played a factor in lower
sales in the province last month so activity will be “closely
watched” in March, the real estate group said.

Unit sales in British Columbia were down 13.3 percent in
February from January, compared with a 3.3 percent advance in
Ontario. Both these markets are expected to see a heated spring
housing season before new harmonized sales tax regimes come
into effect in July.

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($1=$1.02 Canadian)
(Additional reporting by Walden Siew in New York; editing by
Rob Wilson)

UPDATE 2-Canada home resales cool for 2nd straight month