Canada hits 100 billion dollars

The total annual value of resale homes sold in Canada topped the $100-billion mark for the first time in 2007, but some late-year signs of fatigue in the market are expected to carry into 2008.

Sales came in at a total $118.3-billion last year, while the average price of an existing home also hit a record of $326,055 in the major cities tracked by the Canadian Real Estate Association (CREA).

In the fourth quarter, sales slowed due to fewer transactions in Calgary, Vancouver, Ottawa and Montreal, according to CREA. Some the country's strongest markets near the end of the year were Saskatoon, Newfoundland and Labrador and Toronto.

While a sag in December sales activity could continue in 2008, the Canadian market is still in much better shape than that of the United States, said Douglas Porter, deputy chief economist at the Bank of Montreal.

“Even with the slight sag in December, Canadian home sales still easily hit a new annual high last year, in staggering contrast to the deepening trauma south of the border,” Mr. Porter said in a research note.

“Housing is very unlikely to provide as much support to Canadian growth in 2008, but it's also highly unlikely to follow the U.S. market's due-south lead either.”

Home prices, which rose 10.8 per cent in 2007 compared with 2006, are expected to go up at a more modest rate in 2008, according to CREA.

“A decline in inflationary pressures due to slower U.S. economic growth will enable the Bank of Canada to reduce interest rates,” said Gregory Klump, CREA chief economist. “Additional interest rate cuts this year will keep resale housing market activity on a strong footing, and prices will continue to rise but at a slower pace.”

A very impressive number and one that will be surpassed next year I am sure.

By Lori Mcloed