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.