National resale housing market activity continued climbing in July 2009, with sales posting the largest year-over-year gain in two years, according to a recently-released report from the Canadian Real Estate Association.
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.
According to statistics released by CREA, a total of 50,270 homes traded hands via the Multiple Listing Service® (MLS®) of Canadian real estate boards in July 2009. This is up 18.2 per cent from the same month last year, and stands 3.9 per cent above the previous record for the month of July set back in 2007.
“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.
“Home buyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher,” he added.
Resale activity in July 2009 was up from the same month last year in about 60 per cent of local markets. Year-over-year gains in Toronto (28 per cent), Vancouver (90 per cent), Montreal (19 per cent), Calgary (22 per cent) and Edmonton (28 per cent) contributed most to the national increase in activity.
Locally, July MLS® sales established a new dollar volume record for the month with a total of $276 million, although actual sales were down two per cent.
“The only reason we’re not now talking about big percentage increases similar to other Canadian markets is that we never experienced the same significant sales declines that other markets did last year,” said WinnipegREALTORS® president Deborah Goodfellow.
“While there is more news reported of the Canadian economy recovering from the recession,” she added, “Manitoba has been very resilient throughout this period and has withstood any serious impact from the economic downturn.”
Demand is rebounding sharply in some of Canada’s priciest housing markets, which continues to skew the national average price upward. The national MLS® residential average price rose 7.6 per cent from one year ago to $326,832. In Manitoba, the average price rose 3.3 per cent to $200,923 from a year ago.
According to CREA, 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.
“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 of months of inventory is on the wane,” said CREA chief economist Gregory 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.
“Home sales through the MLS® systems in July provide clear evidence that sentiment about making major purchases continues to improve,” added Krump. “Activity may level out over the rest of the year as home prices and mortgage lending interest rates creep higher.”