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Home sales picked up in April
Friday May 15, 2009

Home sales picked up in April for the third month in a row, but the real estate market has not yet made up for all the lost momentum of the past year, the Canadian Real Estate Association says.

Sales of homes in Canada, seasonally adjusted, jumped 11.2 per cent in April compared to March, the largest month-to-month increase in more than five years, CREA said. The gain compounds advances of 10.3 per cent in February and 7.7 per cent in March.

Home sales volumes were a full 32 per cent above January`s levels – the lowest levels in a decade.

Compared to a year ago, however, home sales were down 11.8 per cent, CREA said. Still, this is a far milder decline than the record year-over-year drop of 42.2 per cent in November.

Prices are still lower now than a year ago, with the average sale price in April at $306,366 – about 3.2 per cent lower than April, 2008, when prices hit their pre-recession peak.

The volume of homes trading hands rose in 70 per cent of local markets in April, compared to March, CREA added. In particular, Toronto saw a 10 per cent increase, Vancouver`s sales rose 30 per cent, Montreal was up 15 per cent and Calgary was up 31 per cent.

Still, compared to a year ago, home sales in Toronto were 10.5 per cent lower, Vancouver was off 17.4 per cent, Montreal was down 4.3 per cent and Calgary was 21 per cent lower.

The only cities showing a year-over-year increase in sales were Kitchener-Waterloo in southern Ontario, and Ottawa.

The key to the substantial increase in sales in the past few months is a growing realization by sellers that pricing has to be realistic, said Dale Ripplinger, a real estate broker based in Regina and also the president of CREA.

“Price adjustments in some markets have helped affordability. Second, lenders do have money for people and properties that qualify, although some are being more stringent.”

A recovery of consumer confidence has also helped boost sales in the housing market, he said.

Also encouraging a more stable housing market is a continuing decline in the supply of homes coming on to the market, CREA noted. New listings in April (seasonally adjusted) were 1.8 per cent lower than in March, and 16.4 per cent lower than the peak of May, 2008.

The spring housing market has been more active than CREA had anticipated, prompting a small upward revision to its forecast for sales for the rest of 2009.

For 2009, CREA now expects sales to fall 14.7 per cent to 307,500 homes – slightly less than in its last forecast issued in February. Stronger-than-expected rebounds in British Columbia and Ontario were the drivers behind the revision, CREA said.

2010 should bring a 7.2 per cent increase in sales – a slightly weaker rebound than in previous forecasts because of downgraded expectations for economic growth next year. The rebound is expected to be strongest in British Columbia and Alberta.

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