(Adds comment from economist)
By Andrea Hopkins
OTTAWA, Oct 13 (Reuters) - The resale of Canadian homes grew 2.1 percent in September from August, led by gains in Toronto and Vancouver, suggesting national sales may be stabilizing after cooling sharply in the spring, the Canadian Real Estate Association said on Friday.
The industry group said actual sales, not seasonally adjusted, were down 11.0 percent from September 2016, while home prices were up 10.7 percent from a year earlier, according to the group’s home price index.
“National sales appear to be stabilizing,” CREA President Andrew Peck said in a statement. “While encouraging, it’s too early to tell if this is the beginning of a longer-term trend.”
Canada’s once-sizzling housing market has cooled dramatically in recent months, particularly in Toronto, the largest city, after a foreign buyers tax was announced in April, and analysts are divided over whether the market is in the midst of a full-scale correction or will bounce back quickly.
In addition to the implementation of a foreign buyers tax in Vancouver in 2016 and Toronto in 2017, two recent interest rate hikes by the Bank of Canada has helped rein in demand.
The report showed activity was up on the month in about half of all local markets, including Vancouver and Toronto. Cities around Toronto had mixed results, with activity remaining near record lows or falling further in some markets.
Sales were down from year-ago levels in nearly three-quarters of all local markets, led by Toronto and nearby housing markets.
The 10.7 percent year-over-year increase in CREA’s Home Price Index was a continued deceleration in annual price gains earlier in the year. The actual national average price for homes sold in September was up almost 3 percent from a year ago at C$487,000 ($390,537), CREA said.
Home resale prices dropped 0.8 percent in September from August, their biggest fall in seven years, while new home prices rose 0.1 percent in August, separate reports showed on Thursday.
The report showed the number of newly listed homes rebounded almost 5 percent in September from August, breaking a string of three straight declines.
The national sales-to-new listings ratio declined to 55.7 percent from 57.2 percent in August. A ratio between 40 and 60 percent is generally consistent with a balanced market.
CREA said there were five months of inventory on a national basis at the end of September 2017, unchanged from August.
$1 = 1.2470 Canadian dollars Reporting by Andrea Hopkins; Editing by Bernadette Baum and Susan Thomas