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BC leads nation in home sales

VANCOUVER — B.C. led Canada in new monthly records for residential sales last month, according to a report released Monday by the Canadian Real Estate Association.

“Of all the provincial monthly gains, B.C.’s was the highest,” CREA chief economist Gregory Klump said in an interview. “B.C. had the most dramatic decline in sales activity last year [and] it’s also had the most dramatic rebound in recent months. They fell the furthest so they have the biggest ground to make up. And that’s what’s happening. It’s rebounded to a new all-time monthly record for sales activity.”

Klump said many buyers who had moved to the sidelines are returning to the market due to price discounts and lower mortgage rates.

“The pent-up demand in B.C. has been bigger,” he added.

In October, B.C. residential sales totalled 8,624 sales, a 115-per-cent increase over 4,018 sales in October 2008, according to the report. The average price in B.C. also rose from $420,259 in October 2008 to $493,328 in October 2009.

The national report noted that home sales hit a new record high in October, leading CREA to boost its outlook for 2009 and 2010.

Nationally, resale home activity was up 41.5 per cent in the month, reaching a total of 42,288 units. On a seasonally adjusted basis, homes sold on the Multiple Listing Service totalled 45,818 units in October.

“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” said CREA president Dale Ripplinger.

“The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories.”

Further, said Millan Mulraine, economics strategist at TD Securities, “we expect the recent strong gains in the housing market to remain largely intact, though we suspect that the back-to-back double-digit advance in sales seen earlier this year may not be repeated.”

As a result of the sector’s strong performance, CREA increased its forecast for sales in 2009 by 6.6 per cent to 460,200 units. For 2010, the national industry group said sales would rise seven per cent to 492,300 units.

The average home price also reached new highs in October, climbing to $341,079, up 20.7 per cent from a year ago.

A separate measure, which limits its focus to Canada’s major markets, showed the average price rising 22.1 per cent to $373,095.

At the same time, the sharp rise in housing demand has eaten into inventories. With 194,994 homes listed for sale in Canada at the end of October, the number of listings is 20.8 per cent below the peak reached in October of last year.

It’s the sixth month in a row in which inventories have fallen from year-ago levels, bringing supply to 4.1 months on a seasonally adjusted basis, the lowest level in more than two years.

Klump said new listings are expected to rise in coming months in response to headline average price increases.

New monthly sales records were set in about one fifth of local markets in October, including Toronto, Montreal and Ottawa. On a provincial basis, new records were set in British Columbia, Ontario and Quebec, largely as a result of increased activity in those provinces’ major markets.

With a file from Canwest News Service