Briefly:

Previous Brieflies this week: | MON | TUE | WED | THU |

Canadian homes sales activity last month was down 30% from a year earlier — a decline driven largely by a widely expected slowdown following the introduction of a new tax regime in the once-hot markets of B.C. and Ontario.

The Canadian Real Estate Association says July’s data from the Multiple Listing Service, which handles the bulk of Canadian home resale transactions, continued a months-long cooling trend in the once-bustling real estate sector.

“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA president Georges Pahud. “Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”

On a seasonally adjusted basis, sales were down 6.8% from June.

CREA says the decline was almost entirely the result of fewer sales in British Columbia and Ontario, where the harmonized sales tax was implemented July 1, prompting many would-be buyers to push sales forward into the first half of the year.

British Columbia had the biggest drop-off at 14.1%, followed by Ontario with an 8% decline. Meanwhile, sales in the Prairies and Quebec were on par with June levels.

But the association says the pace of the decline was slower than in May and June — which followed an extremely busy period early this year.

– The Canadian Press

• • •

China overtakes Japan as world’s No. 2 economy

Japan lost its place as the world’s No. 2 economy to China in the second quarter as receding global growth sapped momentum and stunted a shaky recovery.

Gross domestic product grew at an annualized rate of just 0.4%, the government said Monday, far below the annualized 4.4% expansion in the first quarter and adding to evidence the global recovery is facing strong headwinds.

The figures underscore China’s emergence as an economic power that is changing everything from the global balance of military and financial power to how cars are designed. It is already the biggest exporter, auto buyer and steel producer, and its global influence is expanding.

China has been a major force behind the world’s emergence from deep recession, delivering much-needed juice to the U.S., Japan and Europe. Tokyo’s latest numbers, however, suggest that Chinese demand alone may not be enough for Japan or other economic giants.

“Japan is the canary in the gold mine because it depends very much on demand in Asia and China, and this demand is cooling quite a bit,” said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. “This is a warning sign for all major economies that just focusing on overseas demand won’t be sufficient.”

China has surpassed Japan in quarterly GDP figures before, but this time it’s unlikely to relinquish the lead.

China’s economy will almost certainly be bigger than Japan’s at the end of 2010 because of the huge difference in each country’s growth rates. China is growing at about 10% a year, while Japan’s economy is forecast to grow between 2 to 3% this year. The gap between the size of the two economies at the end of last year was already narrow.

Japan’s nominal GDP, which isn’t adjusted for price and seasonal variations, was worth $1.286 trillion in the April-to-June quarter compared with $1.335 trillion for China. The figures are converted into dollars based on an average exchange rate for the quarter.

– The Associated Press

(08/16/10)