Canada's housing market is back on a roll, a finding that should be evident in the September sales data that the Canadian Real Estate Association will release on Tuesday.
The slump that began in the summer of 2012 came to an end this past summer, with sales topping economists' forecasts, and the market showing a surprising amount of momentum.
Preliminary numbers from local real estate boards suggest that September's national figures will continue the streak of strong results. The Toronto Real Estate Board said the number of houses sold in the Toronto area via the Multiple Listing Service during September came in 30 per cent higher than a year earlier, while Calgary's real estate board posted a 19-per-cent increase. Sales in Vancouver, the Canadian city hardest hit during the recent downturn, rose 63.8 per cent from a year ago.
It's worth noting that the market was in the doldrums at this point last year, which inflates the year-over-year comparisons. But the numbers still point to a market that has recovered, and then some. The 7,411 houses sold in the Toronto area was 9.6 per cent higher than the 10-year average for September. Calgary's sales are 14 per cent higher than the long-term average for that month, and Vancouver's sales are now back in line with the average.
Bank of Montreal senior economist Robert Kavcic said he expects that sales nationally will come in about 15 per cent higher than last September, and that prices will have risen by 8 per cent over the year.
While Mr. Kavcic sees the housing market as "pretty balanced and well-behaved," Canadian Imperial Bank of Commerce economist Benjamin Tal thinks it is probably too hot for the comfort of regulators and the federal government.
Economists are watching to see how much of the recent strength stems from buyers jumping into the market to lock in preapproved mortgage rates. Some experts expect sales to slide in the next month or two, as that phenomenon wears off in the face of higher rates.
Meanwhile, housing starts continue to top expectations, with developers betting that the market still has legs. Last week, Canada Mortgage and Housing Corp. said there were 193,637 housing starts in September on an annualized basis. Economists had been forecasting 185,000 starts.