Home sales rise in November for fourth straight month
The Canadian Press
Published Wednesday, December 15, 2010 2:14PM EST
TORONTO - Canadian home sales grew in November for the fourth straight month but continued a trend of unfavourable comparisons to the same month last year, when sales reached record levels.
Seasonally adjusted home resales were up 4.8 per cent compared to October, according to the Canadian Real Estate Association's monthly report.
Home resales on CREA's Multiple Listing Service have also rebounded by 19.5 per cent from July, when the market hit a trough following the introduction of new mortgage rules, higher interest rates and a new tax in two provinces.
However, actual home sales were down 9.3 per cent compared to record activity last November, consumer confidence improved from the recession and buyers rushed into the market to secure a new home while mortgage rates were near record lows.
"A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels," CREA said in its release, adding that the persistence of large year-over-year declines has been masking the steady improvement in sales since July.
Robert Kavcic, an economist at BMO Capital Markets said falling long-term mortgage rates and improved consumer confidence have helped stabilize the market after a downturn in the spring and early summer.
"After a dramatic ride that saw a recession, a piping hot rebound and a subsequent mini correction, the Canadian housing market seems to have landed softly on stable ground. The market now appears well balanced, with neither buyers nor sellers holding a meaningful edge."
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009.
Prices also increased from October, when the average home cost $343,747, up less than a percentage point compared to one year ago. Still November prices were down from May when prices peaked at $346,881.
Gregory Klump, CREA's chief economist projects that the housing market will remain in balanced territory in the coming months.
"With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months," he said.
"Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy."
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of the ten most active markets.
The number of new listings on the MLS edged down 0.7 per cent and are now down nearly 15 per cent from the peak reached this April.
The decline in new listings is consistent with cooling activity in the housing market since the middle of the year, and has created balanced market conditions in about 60 per cent of Canadian markets.
About two-thirds of the remaining markets remain in sellers' territory.
It would take an average of 5.8 months to sell all of the current houses on the MLS in November -- down from 6.1 months in October.