Ottawa, ON, January 15, 2014 - According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity posted its third consecutive month-over-month decline in December 2013.

Highlights:

• National home sales fell 1.8% from November to December.
• Actual (not seasonally adjusted) activity stood 12.9% above weak December 2012 levels.
• The number of newly listed homes dropped 4.3% from November to December.
• The Canadian housing market remains in balanced territory.
• The national average sale price rose 10.4% on a year-over-year basis in December.
• The MLS® Home Price Index (HPI) rose 4.3% year-over-year in December.

The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations and other co-operative listing systems was down 1.8 per cent on a month-over-month basis in December 2013, marking the third straight monthly decline....

The Bank of Canada announced on January 22^nd 2014 that it was keeping its trend-setting overnight lending rate at 1 per cent, where it has been held since September 2010.

Since the Bank’s last announcement in early December, inflation in Canada has moved even further below the Bank’s 2 per cent target. Moreover, the Bank indicated it is now expected to remain lower for even longer and not return to target for “about two years.”

The rising risk of lower inflation has been a theme since last fall. Since then, the Bank’s warnings about how rates will eventually rise have given way to a more neutral stance on where interest rates are headed next.

Low and still falling inflation could be used to justify an interest rate cut, but the Bank remains concerned about high household indebtedness and the potential for lower interest rates to fuel further debt accumulation.

In its...