Canadian housing continues turnaround
Garry Marr, Financial Post
Published: Thursday, October 15, 2009
Canadian housing sales continued their remarkable turnaround, recording the best third quarter ever on record.
The Canadian Real Estate Association, which represents about 100 boards across the country, also said prices are now beginning to follow sales. The average national sales price in the third quarter was $327,736, an 11% increase from a year ago.
Prices increases are getting bigger. The Ottawa-based group said the average Canadian sale price of a home last month was $331,602, a 13.6% increase from a year ago.
But these increases, triggered by tight inventory levels, will likely slow as sellers begin to realize it is a good time to list their homes.
"Headline average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year," said Gregory Klump, chief economist with the Ottawa-based group. "An increase in new listings will help keep a lid on price increases. Price increases over the rest of 2009 and early next year are likely to reflect declining average prices late last year and earlier this year."
To put it context how much the market has rebounded, sales in the third quarter were up 48% from the bottom reached in the fourth quarter of 2008.
"Low interest rates, rebounding consumer confidence and improving overall sense of economic security continue to draw homebuyers to the housing market," said Dale Ripplinger, president of CREA.
Canada's largest cities are driving the housing market. Vancouver sales in the third quarter were up 34% from the second quarter.
Toronto sales rose 11% during same period while Calgary climbed 19%. The September sales numbers continued the trend with a 1.5% increase in activity from August for the entire country. The latest bump in sales puts the market 63% above January low.
Mr. Klump indicated the market should plateau shortly as inventory levels continue to improve. The number of months of inventory in the market -- which is based on the number of months it would take to sell current inventories based on current sales activity -- was 4.9 months in September. That figure was down slightly from August and way off the peak of 12.8 months reached in January, 2009.
The total dollar figure for all sales in the quarter reached $41-billion. the highest level on record. British Columbia and Ontario reached new highs for dollar volume.
"Monthly sales activity remained on a strong upward trajectory throughout the third quarter in British Columbia while showing signs it may be topping out in other provinces," said Mr. Klump. "On balance, this suggest the sales activity may be starting to plateau after having climbed rapidly earlier this year."
Garry Marr, Financial Post
Published: Thursday, October 15, 2009
Canadian housing sales continued their remarkable turnaround, recording the best third quarter ever on record.
The Canadian Real Estate Association, which represents about 100 boards across the country, also said prices are now beginning to follow sales. The average national sales price in the third quarter was $327,736, an 11% increase from a year ago.
Prices increases are getting bigger. The Ottawa-based group said the average Canadian sale price of a home last month was $331,602, a 13.6% increase from a year ago.
But these increases, triggered by tight inventory levels, will likely slow as sellers begin to realize it is a good time to list their homes.
"Headline average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year," said Gregory Klump, chief economist with the Ottawa-based group. "An increase in new listings will help keep a lid on price increases. Price increases over the rest of 2009 and early next year are likely to reflect declining average prices late last year and earlier this year."
To put it context how much the market has rebounded, sales in the third quarter were up 48% from the bottom reached in the fourth quarter of 2008.
"Low interest rates, rebounding consumer confidence and improving overall sense of economic security continue to draw homebuyers to the housing market," said Dale Ripplinger, president of CREA.
Canada's largest cities are driving the housing market. Vancouver sales in the third quarter were up 34% from the second quarter.
Toronto sales rose 11% during same period while Calgary climbed 19%. The September sales numbers continued the trend with a 1.5% increase in activity from August for the entire country. The latest bump in sales puts the market 63% above January low.
Mr. Klump indicated the market should plateau shortly as inventory levels continue to improve. The number of months of inventory in the market -- which is based on the number of months it would take to sell current inventories based on current sales activity -- was 4.9 months in September. That figure was down slightly from August and way off the peak of 12.8 months reached in January, 2009.
The total dollar figure for all sales in the quarter reached $41-billion. the highest level on record. British Columbia and Ontario reached new highs for dollar volume.
"Monthly sales activity remained on a strong upward trajectory throughout the third quarter in British Columbia while showing signs it may be topping out in other provinces," said Mr. Klump. "On balance, this suggest the sales activity may be starting to plateau after having climbed rapidly earlier this year."
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