Steady Prices, Low Rates Push up Canadian Home Sales
More Canadians were able to purchase new homes in the last month of 2011, according to the new data released by the Canadian Real Estate Association (CREA), which attributed the rise to low interest rates and steady house prices.
Home ownership soared by 1.8% in December, pushing for the national total sales to peak by 2.2% to 456,749 at the year end, the new CREA data showed.
Home listings jumped by three percent in the same period but home prices posted modest improvement of only 0.9%, year-on-year, leaving the overall picture in a virtual equilibrium, according to CREA.
For the most part, Canada’s housing market posted growths except for retreats in some segments. CREA reported that national sales in December grew by 4.6% as compared to the performance seen in the same month the year before.
“The momentum in sales activity provides clear evidence that low interest rates continue to draw homebuyers to the housing market,” CREA president Gary Morse said.
He predicted that “Canada’s housing market will continue to benefit from low interest rates in 2012, and continue making a significant contribution to Canadian economic activity.”
CREA also reported that Canada’s housing market has achieved a national balance ratio of 54.8% in December, coming from the 55.5% recorded in the previous month.
In terms of total inventory for the national market, the December level circled back to what was seen by the start of the year and was pegged at 5.8 months, a decrease from the 5.9 months posted in November.
As the number of houses in the market shrinks, average house prices across the nation only improved to $347,801, which according to CREA chief economist Gregory Klump was the lowest registered since October 2010.
Klump said that despite the prevalence of better interest rates, it is unlikely that overall sales will grow dramatically this year, the prevailing affordability notwithstanding.
“With interest rates widely expected to remain low throughout 2012, home ownership will remain affordable, and continue to support home sales activity,” Klump stressed.
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