Canadian home sales post biggest decline in nearly three years

By Fergal Smith

TORONTO (Reuters) - Canadian home sales dropped in February by the most in nearly three years as an uncertain outlook for the economy due to the onset of a trade war kept buyers on the sidelines, data from the Canadian Real Estate Association showed on Monday.

Sales fell 9.8% in February from January, the biggest decline since May 2022, and were down 10.4% on an annual basis.

"The uncertainty of the last few weeks seems to be causing some buyers to think twice about big financial decisions right now," James Mabey, CREA Chair, said in a statement.

U.S. President Donald Trump's tariff hikes will drag down growth in Canada, Mexico and the United States while driving up inflation, the Organisation for Economic Co-operation and Development forecast on Monday.

The industry group's Home Price Index edged down 0.8% on the month and was down 1% annually, while the national average selling price was down 3.3% on the year.

Separate data from the Canadian Mortgage and Housing Corporation, the national housing agency, showed that housing starts fell 4% in February compared with the previous month to a seasonally adjusted annualized rate of 229,030 units.

Economists had expected starts to rise to 250,000.

(Reporting by Fergal Smith; Editing by Mark Porter)