“July proved to be another strong month for Canadian home sales with the Canadian Real Estate Association now predicting 2011 will see an increase in sales as opposed to a previous forecast for a drop.” Financial Post – August 17, 2011.
July sales were up 12.3% from this time last year, though year-to-date sales are still lagging 2010 sales by 1.6%. According to the article, the national average price: $361,181 is up 9.3% from a year ago.
Before getting too excited about the 9.3% increase, remember that the HST was implemented just a year ago along with stricter mortgage regulations. This created an increase in sales in the early part of last year to July 1 and a flat market afterwards. Since total year to date volume is only lagging by 1.6%, it looks like the effect of these two market busters has dissipated, which is good news for sellers.
CREA expects that 2011 will modestly surpass 2010, even though they had previously been predicting a decline of 1% for this year from last.
BMO Deputy Chief Economist, Douglas Porter, reveals that this unpredicted upswing in the Canadian real estate market is a surprise to everyone. He is quoted as saying, “In a world seemingly awash in negative economic surprises in 2011, one positive surprise has been the resiliency of Canada’s housing market.”
“Canadian housing remains surprisingly robust, thanks to still-low interest rates and solid job growth. While the recent financial market turmoil may temporarily weigh on activity, sales should ultimately find support from continued exceptionally low borrowing costs.”
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