TORONTO (Reuters) - Canada’s housing market has bounced back sufficiently from an “awful winter” for prices and unit sales to stabilize by the end of the year, one of the country’s leading real estate companies said on Tuesday.
Real estate firm Royal LePage forecast in its latest survey that the 2009 national average house price will be down by 2 percent at C$297,500 ($256,466) by yearend. That’s up from its January forecast of a 3 percent decline to C$295,000.
It sees a 1.0 percent drop in unit sales to 430,000. Its forecast in January was for 416,000 sales.
Canadian home resales took a beating in the first quarter when recession fears were at their worst and consumer confidence at its lowest. There were signs of recovery in the spring, but the national average price remains slightly behind the price in the same period last year.
Low mortgage rates and leveling unemployment have helped the market return to a more even keel, Royal LePage said.
The survey said the average price of detached bungalows fell 3.5 percent to C$327,964 year-over-year in the second quarter. The average price for a two-story home decreased 3.7 percent to C$392,378, while standard condominiums fell 4 percent to C$236,612.
“Given the grim shape that Canada’s real estate market was in this past winter, the turnaround we have witnessed in the second quarter is really quite remarkable,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services, a unit of Brookfield Properties.
“We believe this improvement represents a sustainable change across the country,” he said. “While seasonally weaker conditions are to be expected in the fall, the plucky Canadian real estate market is stabilizing and a healthy level of activity is forecast for the second half of 2009.”
Western Canadian cities will likely continue to see prices correct this year after last year’s steep decline, Royal LePage said. It said the average price in Calgary, Alberta, will moderate to C$386,000, down 4.8 percent, while in Edmonton, Alberta, it will fall 4.6 percent to C$317,500.
The average price in Vancouver, British Columbia, will fall 5.7 percent to C$560,000, Royal LePage said.
Prices appreciation in many Eastern and Central Canadian markets will offset the weakness in the West, the survey said.
The Toronto market, Canada’s biggest, will see a 1.5 percent decline from the previous year to C$374,400, it said.
Reporting by Ka Yan Ng; editing by Peter Galloway