Continuing strength in the housing market, including the highest ever sales recorded in October, have prompted the Canadian Real Estate Association to upgrade their forecasts for 2009 and 2010.
The national association now says activity will now reach 460,200 sales this year, up 6.2 per cent from 2008. The previous forecast in August had sales remaining flat. Before that CREA had forecast a 14.7 per cent decline.
"Pent up demand built in late 2008 and early 2009 as many buyers moved to the sidelines," said CREA president Dale Ripplinger in a report released today. "With the economic outlook having improved since then, the release of pent up demand will boost activity over the rest of the year and into 2010."
Home sales in 2010 are expected to increase by 7 per cent, from a earlier forecast of 5.2 per cent.
The new sales forecasts put activity on par with 2004 levels, but below levels experienced from 2005 to 2007, the peak years of the market.
"The fire in the Canadian housing market has clearly been rekindled as homebuyers take advantage of very favorable mortgage rates and the various fiscal incentives," said Millan Mulraine, an economics strategist with TD Securities. "We expect the recent strong gains in the housing market to remain largely intact, though we suspect the back to back double digit advance in sales seen earlier this year may not be repeated."
Residential sales on the Multiple Listing Service hit 42,288 units, the highest ever recorded for that month, and up 41.5 per cent compared to last October, according to the board.
The gulf between this October and last is particularly vast because October 2008 was the start of the financial crisis that hammered consumer confidence.
The October figure is 2 per cent higher than the peak recorded in 2007 for that month.
Average sale prices were also up by 22.1 per cent from the same month last year to $373,095.
The record figures were spurred on by activity in centers such as Toronto, where sales soared to 8,476 sales in October, up a staggering 64 per cent from the same month last year.
The average price for a home in October was up 20 per cent to $423,559, the highest on record.
This is fantastic news for the housing market after such a difficult year.
Visit Ottawa Moves for more information