The strongest December in history for sales of existing homes helped power the Canadian real estate market to a strong finish in 2009.
The Canadian Real Estate Association reported today that 27,744 homes traded hands in December, up 72 per cent from a year ago.
“Sales activity in 2009 came in like a lamb and went out like a lion,” said CREA president Dale Ripplinger.
The national residential price was $337,410 in December, up 19 per cent year over year. On an annual basis, prices are up 5 per cent to a record $320,333. Sales are up 7.7 per cent, representing the fourth best year on record.
“The large year over year increase in the national average price in December reflects the high degree to which it was skewed downward in late 2008 by unusually low activity,” said the association.
Another reason for rising prices last year was the lack of inventory. However, the trend in December seems to be reversing, with new listings that month up 4.8 per cent from the prior year, the first year over year gain in a year.
Strong prices are driving sellers back into the market, says CREA.
In the Toronto market existing home sales bettered 2008 by 17 per cent, while the average price of a home was up 4 per cent to $395,460.
With prices and sales spiking, some economists have said that the market is getting dangerously close to bubble territory.
“CREA’s latest statistics will no doubt spark further bubble talk among the usual suspects,” said CREA Chief Economist Gregory Klump. “Cooler heads recognize that many of the recent gains reflect temporary factors that could fade by summer.”
Some economists have said that Toronto area housing prices are already overvalued by up to 6 per cent based on demographics and historical valuations.