Real Estate market over $100 Billion

The resale housing market cracked $100-billion in sales activity for the first time in Canada’s 25 largest markets, according to the Canadian Real Estate Association. The Realtor group said 362,934 units sold last year, a 7.9% increase from a year ago. Annual sales records were set in Regina, Saskatoon, Winnipeg, Toronto, London and St. Thomas, Hamilton-Burlington, Kitchener-Waterloo, Ottawa, Montreal, Quebec City, Saint John, Halifax and Newfoundland and Labrador

“The statistics show just how dynamic the Canadian housing market was in 2007 in virtually all parts of the country,” said Ann Bosley, president of CREA. “The record sales activity shows it remains a very affordable real estate market.”

In terms of sales, the Canadian real estate market appears to have peaked in the second quarter. However, the drop-off has been moderate with sales in the fourth quarter down only 1.6% from the third quarter.

For the year, CREA said the dollar figure for sales in the country’s 25 largest market was $118.3-billion, a 19.6% increase from a year earlier. The large dollar figure was one part record sales transactions and one part record sale prices.

For most of this year it has been a seller’s market, says the real estate group. That has meant rising prices. The average price of a home sold in 2007 reached $326,055, a 10.8% increase from a year earlier. That was the largest annual percentage increase in 18 years.

“Resale housing demand remained high throughout 2007 due to job and income growth, the continuation of attractive financing and upbeat consumer confidence,” said Gregory Klump, chief economist with CREA.

Mr. Klump expects 2008 will continue to be strong and is predicting sales will be the second highest on record, trailing only last-year’s pace.

The housing sector is forecast to get a boost from the Bank of Canada which many anticipate will lower rates due to slower U.S. economic growth.

“Additional interest rate cuts this year will keep the resale housing market activity on a strong footing and prices will continue to rise, but at a slower pace,” said Mr. Klump.