OTTAWA (Reuters) - Sales of existing homes in Canada jumped 73 percent in November from a year earlier to just below the record high for the month, the Canadian Real Estate Association said on Tuesday.
The robust figures were in stark contrast to those for the overall economy, which is still struggling to pull out of recession.
CREA said 36,383 homes changed hands in November on a seasonally adjusted basis, just 0.4 percentage points below the record high set in November 2007.
In the provinces of Ontario and Quebec, home sales did hit record highs for November, it said.
“The report suggests that the Canadian housing market remains on fire as the combination of low mortgage rates and still favorable buying conditions continues to spur buying activity,” said Millan Mulraine, economics strategist at TD Securities.
The central bank’s promise to keep its benchmark interest rate at rock bottom at least until mid-2010, combined with renewed consumer confidence, has fueled a house-buying spree in Canada that has surpassed all expectations and raised fears of a housing bubble that could explode when rates rise again.
The real estate market slumped during the recession but escaped a U.S.-style meltdown. In fact, in some regions demand and prices merely eased from soaring heights seen before the downturn, a correction that some economists think was overdue.
Existing home sales rose 5 percent in the first 11 months of this year compared with the same period of 2008, but were below levels for that period in each of the three preceding years.
Year-over-year gains were biggest in British Columbia and Ontario at 165 percent and 77 percent, respectively.
The average national price in November rose 19 percent from a year earlier to C$337,231 ($318,142). Year-to-date, the average price was up 4.4 percent from the same period of 2008.
More housing supply was coming on to the market, CREA said, as sellers were lured back by the strong demand and price hikes. Listings rose 5 percent in November from October, the biggest monthly jump since January 2008.
Even so, the strong uptake meant that inventories continued to be drawn down from year-earlier levels for the seventh straight month.
$1=$1.06 Canadian Reporting by Louise Egan; editing by Peter Galloway