Canadian Home Resale Prices Rise to Record in May

This is an article that was printed online at by the Canadian Business Journal on June 14, 2009. (WWW.Canadianbusinessjournal.ca) I hope you find it interesting

TORONTO (Reuters) - Resale prices for Canadian homes rose to their highest average on record in May, while sales activity climbed for a fourth straight month as consumer confidence strengthened, according to an industry report released on Monday. But rebounding sales in some of the most expensive markets skewed the national average price, the Canadian Real Estate Association said in the report. The average home price last month rose 0.4 percent to C$319,757 ($282,971), topping the previous record set a year earlier. It was the first year-over-year increase since May last year. The average price has recovered 16.4 percent from the low reached in January, CREA said. Home sales rose 8 percent to 37,649 units in May from April, the fourth consecutive monthly increase on a seasonally adjusted basis. At the start of the year, the year-over-year drop in sales was a staggering 41 percent and the declines have narrowed since. Nationally, 49,521 units changed hands in May, down 0.8 percent from a year ago.

"In the short space of about 18 months, the housing market has gone full circle from a sellers' market, to a flat-out buyers' market, and back to a sellers' market," said Doug Porter, deputy chief economist at BMO Capital Markets. He cautioned that further gains may be tougher to come by with a still-weak Canadian employment outlook. "The housing market is not about to go off to the races, even if it has been pulled back from the brink." Of the 25 major markets that CREA tracks, 14 reported rises in unit sales year-over-year, with five markets, mostly in the western provinces of Alberta and British Columbia, posting double-digit increases. Those same markets had suffered the biggest drops only several months ago. Prices rose in 14 markets from a year ago, led by a 17.3 percent increase in Newfoundland and Labrador and a 12.1 percent climb in Saint John, New Brunswick. "New records were posted in only 15 percent of local markets in May, none of which are among the most active or expensive," CREA said. "The strong rebound in sales activity, not price, in Canada's most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008." New listings eased by 0.8 percent to 65,070 units, the lowest since December 2005. ($1=$1.13 Canadian) (Reporting by Ka Yan Ng; Editing by Frank McGurty)

 

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