Friday, July 07, 2006

Housing Markets Continue Torrid Pace

The Canadian housing market is still hot, and searingly so in Western Canada.

Nationally, the average price of a home in the second quarter of this year was 14.2 % higher than a year earlier, and up more than 50 % in Calgary and more than 30 % in Edmonton.

Both sales and prices continued to rise across the country in the April-June quarter.

The pace of growth varied greatly by region, with activity levels and price increases in the western provinces far outpacing that in the rest of the country.

But as hot as the housing market is the pace of activity will ease during the lazy-hazy days of summer.

The will allow buyers more time to look before they leap into the market and sellers time to spruce up homes that failed to sell in the spring rush.

This summer's housing market is offering buyers real-estate opportunities that were not available during the record-breaking spring market. Earlier in the year, buyers in many parts of the country had to act instantly or lose the deal. In some cases, sellers have reduced their asking prices after failing to sell in the spring because they tried to make a killing during the market frenzy.

However, both real-estate firms are forecasting the market for housing will remain healthy, reflecting the economy and job market.

Nationally, a 9.2 %5 increase in prices is predicting this year to about $272,200. In Ottawa, where conditions appear to be more balanced, it expects prices to grow 3.5 % in 2006 compared with the year before.

The continued strength of Canada's economy, coupled with strong consumer confidence and rising but moderate interest rates, continued to drive robust demand for housing across the country, noting sales in the spring were at record or near-record levels in most markets.

Still, the supply of homes for sale met demand other than in the West, where it remained a sellers' market.

The story in the West, and particularly in Alberta, is quite different, with extraordinary demand levels far surpassing available inventory, noting that was especially the case in Calgary, Edmonton, and Vancouver. The result has been some of the highest year-over-year price increases that have been experienced in any region of this country in decades.

This pattern will likely continue for the remainder of the year.

Meanwhile, the real estate markets in Central and Eastern Canada saw more modest growth despite robust demand.


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