It’s still a seller’s mar­ket in hous­ing but it’s not a bub­ble, economists say


The re­sale hous­ing mar­ket is ex­pected to reach 527,300 units this year, up 13.3 per cent from 2009. This would be a new an­nual record, up 1.2 per cent above the pre­vi­ous peak in 2007, CREA said Mon­day.

“ You are not hear­ing about a lot of spec­u­la­tive buy­ing,” Greg Klump, the na­tional real es­tate or­ga­ni­za­tion’s chief econ­o­mist, said from Ottawa. “Nor is there a lot of spec­u­la­tive build­ing.” Low in­ter­est rates and buy­ers wish­ing to avoid the har­mo­nized sales tax be­fore it comes into ef­fect in On­tario and Bri­tish Columbia will help fuel re­sales in the first half of this year, he said.

In the sec­ond half of 2010, sales are ex­pected to be lower as in­ter­est rates are ex­pected to in­crease marginally, Klump said.

Klump said there hasn’t been a buyer’s mar­ket na­tion­ally since 1995.

New hous­ing starts have also gone up, ac­cord­ing to fig­ures Mon­day by Canada Mort­gage and Hous­ing Corp.

The sea­son­ally ad­justed an­nual rate of hous­ing starts reached 186,300 in Jan­uary, up 5.8 per cent from 176,100 in De­cem­ber. CMHC re­ported ac­tual hous­ing starts for 2009 to­talled 149,081 units, with ac­tiv­ity im­prov­ing as the year pro­gressed.

TD Bank econ­o­mist Pas­cal Gau­thier said there’s talk of a bub­ble be­cause of how strong hous­ing mar­kets have re­bounded af­ter the eco­nomic down­turn.

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