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TORONTO (Reuters) - Sales of existing homes in Canada rose for a fourth straight month in November, reinforcing market sentiment that stability is returning to the sector after it cooled earlier this year from the red-hot levels of 2009.
The Canadian Real Estate Association (CREA) said on Wednesday a total of 37,658 homes changed hands in November, up 4.8 percent from 35,936 in October. Sales were down 9.3 percent from November 2009.
"The persistence of large year-over-year declines from last year's record levels has been masking the steady improvement in national sales activity since July 2010," CREA said.
Seasonally adjusted activity was up from October levels in two-thirds of local markets, including eight of Canada's 10 most active markets.
Month-over-month increases were reported in core markets such as a 2.6 percent rise in Calgary, a 6.9 percent gain in Edmonton, and 8.2 percent higher in Montreal. The country's two biggest markets also posted solid increases in November, with Toronto rising 6.0 percent and the Greater Vancouver Area adding 11.3 percent.
Low mortgage rates have continued to be a key factor leading to renewed strength in the residential housing market. But the likelihood that the Bank of Canada will lift interest rates in the second half of next year could dampen activity in 2011 and drag on economic growth.
"We expect home sales to remain well supported over the next couple of quarters before increases in borrowing rates eventually begin to ease the pace of sales," said Pascal Gauthier, senior economist at TD Bank.
"The bottom line is that before long, eroding affordability and resale housing sector sluggishness will slightly dampen economic growth."
CREA said the national average price in November rose to C$344,268 ($342,555), up 2 percent from November last year.
The number of new listings slipped 0.7 percent from October.
Reporting by Ka Yan Ng; Editing by James Dalgleish and Peter Galloway