Canadian resale housing market activity continued climbing in July 2009, with sales posting the largest year-over-year gain in two years. It was also the first time on record that sales activity topped 50,000 units for the month of July in any year on record.

Demand is rebounding sharply in some of Canada’s priciest housing markets, which continues to skew the national average price upward. The residential average house price rose 7.6 percent from one year ago to $326,832. However, only seven local markets posted new average price records in July. The strong rebound in sales activity, not price, in some of Canada’s most expensive markets is skewing the national average price upward, just as a sharp decline in activity in these markets skewed the average lower in late 2008.

“Sales activity started off the third quarter on a strong footing,” said CREA President Dale Ripplinger. “The difference in the resale housing market now, compared to the beginning of the year, is night and day, and nowhere is this more evident than in the West. Homebuyers recognise that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher.”

“Home sales through the MLS® systems in July provide clear evidence that sentiment about making major purchases continues to improve,” said Chief Economist Gregory Klump. “Activity may level out over the rest of the year as home prices and mortgage lending interest rates creep higher.”

“The number of new listings coming onto the market is down from last year and the rebound in sales activity is paring inventories, so the number months of inventory is on the wane,” said Klump. “These trends are supporting average prices. Average prices dropped sharply over the second half of 2008 but have rebounded since then, so average prices are expected to continue climbing over the rest of the year.”

House Prices In Canada
July 2009

City House Prices In Canada
July 2009

4 Sep 2009