The Canadian Real Estate Association (CREA) reported that existing home sales had its best month ever in December 2009, housing bubble, what housing bubble!? The second half of 2009 push annual sales above 2008 levels as MLS sales showed 27,744 units sales in December 2009, which was a 72% increase year on year, although December 2008 hit its lowest monthly level in a decade. December 2009 had a new record level of sales for Ontario, Quebec, Saskatchewan, New Brunswick, and Newfoundland & Labrador.
CREA’s President said “The continuation of unusually low interest rates may keep national sales activity near current levels over the
coming months, as will a blip in housing demand in Ontario and British Columbia from homebuyers motivated to beat the introduction of the HST.”
A few interesting stats from the report:
- 465,251 homes were sold in 2009 which was down 10.7% from the 2007 high
- Dec 2009 average house price:$337,410 (+19% year/year)
- Average house prices set new annual recoord in most major cities and all provinces except Alberta
- 2009 residential average price in Canada’s major markets: $348,840 (+5.5% year/year)
These price increases and contiuing strong demand are bringing more sellers to the market as new listings on the MLS across the country increased to 33,090 in December 2009 which was the highest on record (+4.8% over Dec 2008).
Economist Gregory Klump commented:
“CREA’s latest statistics will no doubt spark further bubble talk amongst the usual suspects,” said . “Cooler heads recognize that many of the recent gains reflect temporary factors that could fade by summer.”
“By the second half of 2010, price gains are likely to shrink significantly, since a year will have elapsed since the decline and rebound.”
“Further expected increases in supply will also take some steam out of the market. A more balanced market will result in smaller price increases in the second half of the year, but a massive decline in demand similar to what we saw in late 2008 and early 2009 seems as unlikely as a massive spike in supply.
Here is the overview from Gregory Klump: