The Canadian Real Estate Association announced that it has revised its forecast for sales and prices for the rest of this year and into 2010 as a result.
Its research shows that Alberta in particular has seen a remarkable turnaround. And overall sales activity in August set a record with the average price across the country, which was declining just a few ago, are now up 11.3% from a year ago.
‘The speed with which the market rebounded outstripped all expectations.
Alberta was among one of the most dramatic revisions in terms of unit sales.
It largely reflects something that already happened namely the second quarter which has seen a combination of low interest rates and a sense among consumers that the worst of the recession may be over,’ said Gregory Klump, chief economist with the association.
For Alberta, the association is now forecasting that overall residential sales will decrease by 2.5% this year to 55,000 units and increase by 10.5% in 2010 to 60,750 units.
This is in contrast to its last forecast in May when it sales would drop by 24.7% this year.
It is also forecasting the average sale price this year in the province will decrease by 4.4% to $337,300 and rise by 1.7% next year to $343,200. In May, its forecast was for an 8.8% decline this year to $321,900 and for a 1.1% decrease in 2010 to $318,300.
There has been some strengthening in Alberta’s resale market, according to Lai Sing Louie, regional economist for Canada Mortgage and Housing Corporation.
‘We’re expecting that the second half of the year will be much stronger than the first half,’ he said.
He explained that improved affordability and some government incentives to encourage first-time homebuyers have helped to boost the market. ‘I also believe that people who have been waiting to see how the markets move finally have the confidence now to go into the marketplace and buy,’ he added.
According to Doug Porter, deputy chief economist with the Bank of Montreal also described the recovery as unexpected.
‘Record-low borrowing costs combined with the growing realization that the economic storm is passing have fuelled the remarkable turnaround,’ he said.
The Canadian government has committed to leave rates unchanged until June 2010.
However a new survey from Royal LePage Real Estate Services, found more than a quarter of its agents do not believe the housing market's current strength is sustainable.
