January 20, 2010 - Existing home sales activity reached the highest level ever for the month of December, according to statistics released by The Canadian Real Estate Association (CREA). Strong demand in the second half of 2009, especially in the fourth quarter when sales activity increased 59 per cent, pushed annual sales above 2008 levels.
"Sales activity in 2009 came in like a lamb and went out like a lion," says CREA president, Dale Ripplinger. "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."
The national residential average price was $337,410 in December, up 19 per cent year-over-year. On an annual basis, average price climbed five per cent to a record $320,333. Average prices set new annual records in a majority of local markets in 2009, and in every province except Alberta.
Additionally, the recent rising trend in new listings has not yet offset the steep decline in the number of new listings during the first half of 2009. As a result, new listings in 2009 were down 12.6 per cent from the annual peak in 2008.
"By the second half of 2010, price gains are likely to shrink significantly, since a year will have elapsed since the decline and rebound," says Gregory Klump, chief economist at CREA. "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."