(Adds regional details, forecast)
By Andrea Hopkins
OTTAWA, Sept 15 Sales of existing Canadian homes
fell in August, notching the fourth straight monthly decline,
the Canadian Real Estate Association said on Thursday in a
report that suggested Canada's long housing boom has begun to
The industry group said sales fell 3.1 percent in August
from July, the largest monthly drop in nearly two years, as a
tax on foreign buyers in Vancouver sent buyers to the sidelines
and doused activity in Canada's most expensive market.
Actual sales, not seasonally adjusted, were up 10.2 percent
from August 2015, while CREA's Canadian home price index was up
14.7 percent in August compared with the year before, reflecting
the blockbuster pace of activity prior to the slowdown.
In a separate report, CREA also revised down its forecast
for sales and prices in 2016 and 2017, suggesting Canada housing
boom peaked in early 2016 and has begun to cool.
CREA said the drop in sales activity in August was driven in
part by a sharp decline in British Columbia as the provincial
government imposed a 15 percent property transfer tax on foreign
buyers of homes in Vancouver.
By contrast, sales in Ontario, the other large market, have
held steady in recent months near record levels and have yet to
show signs of cooling, the report showed.
"Single family homes sales were already cooling before the
new land transfer tax on foreign home buyers in Metro Vancouver
came into effect," Gregory Klump, CREA's chief economist, said
in a statement. "The surprise announcement of the new tax caused
sales to brake hard."
Real estate groups and developers had largely opposed the
tax on foreign buyers, but a voter backlash against wealthy
investors, mostly from mainland China, had put pressure on
government to do something to cool price appreciation in the
already expensive market.
In its quarterly forecast, CREA said it projects national
sales activity to rise 6.0 percent in 2016 and average prices to
climb 10.1 percent to C$487,800 this year. That forecast is
slightly below one made three months ago, when a 6.1 percent
gain in sales and a 10.8 percent rise in prices was projected.
It also trimmed its forecast for 2017, projecting a 0.6
percent decline in national sales and a 0.2 percent dip in
prices. In June CREA had forecast sales to rise 0.2 percent in
2017 from 2016 and prices to be inch up 0.1 percent from 2016.
(Reporting by Andrea Hopkins; Editing by Alistair Bell)