Wednesday, October 04, 2006

Canada Existing Home Sales to Hit Record in 2006

Canada's existing home sales will reach a record for the sixth straight year in 2006, as low unemployment and rising incomes boost demand.

Sales of existing homes, which account for about two-thirds of all home sales, will increase by 32 units in 2006 to 483,265. Prices will rise 11 % in 2006.

High employment, upbeat consumer confidence and rising incomes continue to keep the fundamentals strong for housing activity in Canada.

The realtors' prediction supports the Bank of Canada's view that housing will contribute to growth in 2006. The central bank said in July that consumer spending and business investment will spur economic growth of 3.2 % for the year, with 0.2 % coming from housing.

Today's forecast, while for a record, is lower than one released in May, in which predicted sales would rise to 488,160 units this year. Sales are cooling because of higher prices. That trend will continue in 2007, leading to a 4.8 % decline in sales and a 6 % increase in prices.


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