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Housing projected to remain strong

Canada's housing sector is expected to remain “unusually strong” in the first half of the year, then trend towards a more balanced market, Royal LePage, a leading real estate broker, said Thursday.

Improving economic conditions and steady low interest rates will stoke demand as 2010 gets under way, but higher home prices coupled with expectations of rising interest rates could cool the market later in the year.

The housing market virtually halted late in 2008 in the wake of the global financial crisis, as consumer confidence plummeted. It has since recovered swiftly on pent-up demand and improved affordability, which has triggered some concerns about a housing bubble.

“Our forecast is built upon an expectation that interest rates will ease upward before the year's end, which should have a dampening effect on demand, allowing it to come into balance with the supply of resale homes on the market,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.

Toronto Reuters