Canadian existing home sales rose 2.3% in April, pushing the year-over-year growth rate up to 10%. Over two thirds of the markets in Canada recorded annual increases during the month, with the Lower Mainland of British Columbia, Greater Toronto and Montreal leading the way. In contrast, sales were down among key cities in Alberta and Saskatchewan.Today’s data provided further evidence of the regional divergence in the Canadian housing market. Toronto and Vancouver remain the hottest markets in the country, with the drop in mortgage interest rates during the first quarter continuing to provide stimulus. However, given that government bond yields – which influence mortgage rates – have been trending higher in recent weeks, mortgage rates could move higher later this year, dampening demand in these markets“Overall, we expect the regional divide to continue. The Vancouver and Toronto markets should cool slightly once mortgage rates move back up; however, given the tightness in these markets, prices should remain relatively strong. Further weakness in oil-rich regions will only partially offset strength elsewhere, with overall price growth likely to average around 6% this year.” says TD Economics in a report
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