Vancouver home resales up 117 per cent in August compared to one year ago

Vancouver led the nation with a whopping 117 per cent increase in home resales in August compared to August a year ago.

According to statistics released Tuesday by The Canadian Real Estate Association, Canada's resale housing market continues to rally, with 42,483 homes trading hands in August, an 18.5 per cent gain from year-ago levels.

Economists warned however that the market's outperformance in recent months is not likely to be repeated as home prices rise and the market consolidates gains.

On a month-to-month basis, in fact, homes sales dipped slightly to 42,426 units in August from 42,666 in July.

"Canada's housing market has taken its cue more from the Great Houdini than the bear (economist Noriel) Roubini, fully escaping from the clutches of a potentially lengthy, harsh downturn," said BMO Capital Markets deputy chief economist Doug Porter.

"Record-low borrowing costs combined with the growing realization that the economic storm is passing have fuelled the remarkable turnaround. However, the gaudy sales growth will be tough to maintain now that prices are moving higher again."

Resale activity rose from year-ago levels in about three quarters of local markets. Year-over-year gains of 117 per cent in Vancouver, 27 per cent in Toronto, 17 per cent in Calgary, and nine per cent in Montreal contributed most to the national increase in activity.

August marks the third consecutive month in which year-over-year sales rose by more than 15 per cent, CREA said.

Prices also rose, although they were skewed higher by growing demand in Canada's more expensive housing markets. The national average price rose 11.3 per cent from a year ago to $324,779 in August, CREA said.

A market weighted average shows a more modest 5.3 per cent year-over-year rise in average prices

"On balance, given the recent unbelievable strength in the Canadian housing market, the modest (month-to-month) down-shift in sales in August should not be seen as anything other that a brief respite in what has been a remarkable recovery in the sector," said TD Securities economics strategist Millan Mulraine.

"Even so, we believe that Canadian housing market activity in the coming months will be relatively tepid as the sector consolidates the gains made since January."

Table One

August

City / Unit sales / Change (year over year)

Calgary 2,324 +16.8%

Edmonton 1,673 +8.6%

Montreal (CMA) 2,870 +9.3%

Ottawa 1,227 +2%

Toronto 8,042 +27.3%

Greater Vancouver 3,496 +117%

Victoria 723 +47.6%

Note: CMA census metropolitan area. Figures for Toronto include data for Mississauga, Brampton, Durham, Orangeville and York. Source: The Canadian Real Estate Association.

Table Two

August

City / Average price / Change (year over year)

Calgary $388,725 -0.4%

Edmonton $318,321 -3.3%

Montreal (CMA) $276,243 +5%

Ottawa $315,176 +11.5%

Toronto $387,899 +6.3%

Greater Vancouver $608,032 +9.1%

Victoria $481,279 +6.4%