Housing Continues Blistering Pace in 2006

Canada's real estate sector continued to defy predictions of a slump in the market last year, as sales of existing homes continued at near-record levels.

Realtors sold 336,271 homes in 2006, a figure that was just 242 units off the record set the year before.

Moreover, several major cities reported record sales in 2006, including Calgary, Edmonton, Saskatoon, Winnipeg, Ottawa, Montreal and Quebec City.

The high selling pace continued through the fourth quarter and right into December.

Sales surged in Calgary and Toronto, while the smaller centers of Edmonton, Saskatoon, Sudbury and London all set new quarterly records.

Abnormally warm weather gave the market a further boost as the year drew to a close. There were strong gains in Calgary, Toronto and Montreal, giving December the fourth-highest monthly level on record, while Calgary surpassed all previous monthly records.

But there was a downside to the numbers. Selling prices are not going up as fast as they were.

The average Canadian resale house sold for $294,270 in 2006, up 10.6 % over 2005 levels. But that increase was lower than in recent years, and headed lower.

Moreover, the average monthly selling price rose by only 8.1 % in December, compared with the same period in 2005, the smallest increase in the year.

The same trend showed up in the quarter. House prices rose by 9.2 % year-over-year, the first sub 10 % rise in a year.

Price increases have been getting smaller as new listings increased in many markets.