Canadian home sales rose by a seasonally adjusted 2.6 per cent in June from the previous month, showing the housing market remains resilient, the Canadian Real Estate Association said. ( 7/15/2011 )

Canadian home sales rose by a seasonally adjusted 2.6 per cent in June from the previous month, showing the housing market remains resilient, the Canadian Real Estate Association said.

While major gains were made in several markets including Calgary, Montreal, Ottawa, London, Hamilton, and Victoria, monthly sales declined in Vancouver and Fraser Valley in B.C. Toronto’s market remained stable.

“The Canadian housing sector remains on a solid footing,” said Gregory Klump, CREA’s chief economist said in the report released Friday. “The rise in monthly home sales activity at the end of the second quarter, upbeat business sentiment and hiring intentions, and signs that the Bank of Canada is in no rush to raise interest rates bode well for home sales activity and prices going into the second half of 2011.”

On an unadjusted basis, sales were up 10.8 per cent in June from the same month last year. But the adjusted national sales activity was down 4.7 per cent in the second quarter compared to levels in the first three months of the year.

“This in part reflects how new mortgage rules announced in January and implemented at the end of March pulled sales forward into the first quarter at the expense of sales activity in April and May. Mortgage interest rates also rose in April and May, which may have moved some home buyers to the sidelines,” the CREA report stated.

Listings inched up by 1.8 per cent in June relative to May, with the gains in Toronto, Vancouver and Ottawa contributing the most to the national increase. That announcement should come as welcome news for home buyers in Toronto, where listings have been in short supply relative to demand this year.

The national average price for homes sold in June was $372,700, up 8.7 per cent from the same month last year. While that figure is still being boosted by the value of sales in expensive Vancouver neighbourhoods, activity in those neighbourhoods has eased from levels reported in February and March, the CREA report started.

“As a result, property sales above $1 million in Vancouver West, West Vancouver, and Richmond now account for a smaller but still elevated share of national activity,” the report said.

In a research note, Toronto-Dominion Bank economist Sonya Gulati said the figures show the “Canadian housing market is set to experience some moderation in both sales activity and price gains.” She forecasted that, on average, sales and prices will decrease by 15.2 per cent and 10.2 per cent respectively over the next two years.

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