Hot Canada house market to carry into 2010: Re/Max

TORONTO (Reuters) - The Canadian housing market will roll into the new year with momentum that will push the average price of a home to a record high, according to a forecast released by realtor Re/Max on Thursday.

The year is expected to close out with sales topping 465,000 units, a 7 percent increase from 2008, while home values are estimated to jump 5 percent to C$318,000 as 65 percent of Canadian markets surveyed set records.

It's a remarkable reversal in a year that started off under duress due to a crisis in confidence sparked by the worst economic downturn since the Great Depression. Sales dived 27 percent year over year in the first quarter.

"After one of the most difficult first quarters in Canadian housing history, the market miraculously changed course," the report said. "Rising like the phoenix from the ashes, real estate activity across the country gained momentum."

That momentum, driven by low interest rates, rising consumer confidence, and improvement in economic conditions, will result in sales and price growth next year, Re/Max said. It added that inventory will be the wild card, with any decline pushing prices higher.

In 2010, Re/Max expects the number of homes sold in Canada to climb 2 percent to 475,000, while it sees the average price rising to a record high, up 2 percent at C$325,000.

The Canadian Real Estate Association recently put out an even more optimistic forecast, saying it expects sales to rise 7 percent to 492,300 units next year.

Re/Max said Western Canada will lead the sales charge next year, with upswings in such markets as Kelowna and Victoria in British Columbia and Calgary, Alberta.

It expects sales to climb in 19 of the 23 markets it tracks, while home values are seen rising in 21 centers in 2010.

(Reporting by Ka Yan Ng; editing by Peter Galloway)