Canadian home sales rise 4.6% in October. (CBC News)
But CMHC predicts sales to slow in 2011.
The Canadian housing resale market was almost five per cent more active in October compared to the previous month, the Canadian Real Estate Association says.
The 4.6 per cent increase in sales on the agency’s Multiple Listing Service follows similar rises in September and August. As a result, activity is 13.3 per cent higher compared to July, the low point for 2010.
“National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009,” CREA chief economist Gregory Klump said. “This suggests that the Canadian housing market may be starting to normalize.”
On a yearly basis, sales remained 21.6 per cent below the level of October 2009, the most active October ever for home sales.
The national average price for homes sold in October 2010 was $343,747, up less than a percentage point compared to a year ago. October was the fourth consecutive month in which the average resale price has remained roughly even with year-ago levels, suggesting a balanced market.
“After the wild roller-coaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome,” Klump said.
There was 6.2 months worth of housing stock inventory at the end of the month, the group said. Inventory describes how long it would take to sell off all the homes available based on current buying patterns. In September, the figure was 6.5 months.
Housing starts to slow
At the same time, Canada Mortgage and Housing Corp. reported Monday that housing starts are expected to slow in the last three months of 2010 and fall in 2011 from 2010 levels.
The federal housing agency predicted housing starts in the final quarter of 2010 will be in the range of 176,700 to 194,700 in 2010, or approximately 186,200.
In 2011, housing starts will be in the area of 148,000 to 202,300 units, or approximately 174,800 units.
“High employment levels and low mortgage rates will continue to support demand for new homes in 2011,” CMHC chief economist Bob Dugan said in a release.
“Nevertheless, housing starts will decrease to levels are more in line with long term [population growth] next year,” he said.
The agency predicted sales of existing homes also will be lower in 2011.
It forecast sales in the range of 423,800 to 455,900 in 2010, or approximately 440,300 units.
The next year, it estimated, sales will be from about 390,600 to 483,700, or about 438,400.