Monday, January 18, 2010

Flurry of December home sales sets Canadian record

The Canadian housing market has roared into the new year at top speed, with existing home sales activity reaching the highest level ever for December, and with prices still rising.

According to statistics by the Canadian Real Estate Association, residential sales numbered 27,744 units in December 2009, a whopping 72 per cent above activity in December 2008. At this time last year, the CREA was reporting the lowest activity in a decade.

"Sales activity in 2009 came in like a lamb and went out like a lion," said CREA President Dale Ripplinger. "The continuation of unusually low interest rates may keep national sales activity near current levels over the coming months, as will a blip in housing demand in Ontario and British Columbia from homebuyers motivated to beat the introduction of the HST."

New records for the month of December were reported in Ontario, Quebec, Saskatchewan, New Brunswick, and Newfoundland & Labrador. The whole fourth quarterly performance of 2009 was also the strongest ever, with a seasonally adjusted 137,957 homes trading hands, up 2.6 per cent from the previous record set in the first quarter of 2007.

On an annual basis, the 2009 numbers were still down 10.7 per cent from the peak reached in 2007. The latest spurt has impacted prices, as the national average home price was up 19 per cent year-over-year in December to reach $337,410. Nearly all local markets saw new records set for average prices, according to CREA, with the exception of Alberta.

These results will likely continue fears of a housing bubble in Canada. CREA Chief Economist Gregory Klump says that is not the case, and the market could slowly start to correct itself in half a year. "Cooler heads recognize that many of the recent gains reflect temporary factors that could fade by summer," he said.


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