The Canadian housing market "vastly improved" over the last three months, ReMax Canada said Tuesday, but sales are expected to remain sluggish for the rest of the year.
The real estate brokerage firm said in its "Market Trends Report" that sales should return to average levels this fall after a slow summer, but that the pace set in 2009 was unsustainable.
"With the diminished risk of a W recession occurring, rebounding commodity and equity markets, and more positive economic data emerging daily, the outlook for the residential housing market has vastly improved over the past three months," the brokerage stated.
Not everyone would agree with the cheery assessment - sales slowed markedly across the country over the summer, with Vancouver and Toronto seeing drops of more than 30 per cent. Monday, the Real Estate Board of Greater Vancouver said sales were 37.6 per cent lower in September than a year ago, and were only 0.8 per cent higher than August's figures.
Meanwhile, Finance Minister Jim Flaherty warned Monday that the economy was struggling, singling out the housing market as a source of concern. Housing's portion of the economy has grown steadily for the past 10 years, but Bank of Canada Governor Mark Carney warned Thursday that declining affordability and subdued income growth will dampen further growth.
Prices have been moving lower across the country since the spring, but ReMax said the 19 markets it tracks are still seeing higher prices when compared to a year ago.
The brokerage said "by far the most interesting statistic reported" from its agents was an increase in the number of upper-end sales between January and August. ReMax's definition of a luxury home varies by market, from $350,000 in St. John's to $1.5-million in Greater Vancouver. It is difficult to make comparisons to the last market update, released in April, however, because luxury comes cheaper in Tuesday's report - the bar was lowered by $500,000 in Vancouver and Toronto, for example.
"As overall economic performance improves, so too will housing activity," says Sylvain Dansereau, executive vice-president of ReMax Quebec. "History will show sound market fundamentals supported another healthy year of residential real estate activity in 2010."
From the report: * "All markets reported a surge of 20 per cent or more in upper end home sales. Sixty-eight per cent of markets saw upscale home sales climb in excess of 40 per cent, while 21 per cent boasted triple-digit gains.
Sudbury led the country in sales appreciation, rising a significant 17 per cent year-to-date (1,876 units in 2010 vs. 1,599 in 2009).
*While virtually all markets reported softened activity over the summer months, Winnipeg, saw 32 per cent of all homes sell in multiple offers in August.
* Montreal was the sole market still experiencing seller's market conditions, while Greater Toronto and Winnipeg were balanced, slightly favouring the seller.
*First-time buyers led the charge in 58 per cent of markets, while move-up purchasers dominated in 21 per cent of markets. The remainder reported all segments working in tandem.
*Buyers were decidedly taking more time to make their decisions in recent months, with many delaying their home-buying intentions. It is expected that many purchasers sitting on the fence will make their way back into the market on the heels of more positive economic news."