House sales up but not prices

Greater Vancouver posted Canada's second-highest increase in house sales last month.

Sales in the area jumped 16.4 per cent between May and the same month last year, just behind Edmonton's 18.7-per-cent increase, the Canadian Real Estate Association said yesterday.

The average house price for the city and surrounding area was $583,674, down 6.6 per cent from a year earlier.

Nationally, the housing market continued to rebound in May with a fourth consecutive increase in monthly sales, the association said. The Ottawa-based group said the average sale price of a home sold through the multiple listing service reached a record of $319,757.

That's up 0.4 per cent from May 2008, when the previous record was set. The association said the market is now returning to what it called "pre-recession levels" of activity. Nationally, prices are up 16.4 per cent from their January low.

"Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January," association president Dale Ripplinger said. "Strengthening consumer confidence, low interest rates, and improved affordability are drawing buyers to the housing market."

CREA said transaction activity in the country's most expensive markets is leading to an overall rebound, which is helping to skew the average price upward. In the past, the reverse has happened.

There were 49,521 units sold last month, a 0.8-per-cent decline from May 2008.

Actual sales were up in 14 of 25 major markets. Toronto was up 1.9 per cent, Montreal 8.2 per cent and Calgary 11.3 per cent.

The jump in sales activity comes as supply is declining. The pace of new-home building is down close to 50 per cent from last year while new listings in the existing-homes market are also sharply declining.

The association said new listings are at at their lowest level since December 2005. There were 49,438 actual new listings in Canada's top markets, down 22.7 per cent from a year earlier. Greater Vancouver saw new listings fall 35 per cent from a year ago.

"Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses," association chief economist Gregory Klump said. "The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets."

("Vancouver area house prices up 16% and not prices" Source: Vancouver Province)