A new report indicates that home sales during the last couple of months of 2011 were a microcosm of the year as a whole, as housing activity finished on a positive note.
According to statistics released by The Canadian Real Estate Association, national resale housing activity increased nearly 2 per cent from November to December. In addition, the number of newly listed properties rose 3 per cent. The concurrent rise in sales and listings kept national resale housing in balanced territory overall.
Among local markets, activity rose in more than half of them, and in actual national sales activity - as opposed to seasonally adjusted numbers - volume rose 4.6 per cent when contrasted with the same time period in 2010.
Gary Morse, CREA president, said affordable mortgage rates played a significant role in encouraging people to buy.
"The momentum in sales activity provides clear evidence that low interest rates continue to draw homebuyers to the housing market," said Morse.
The report also revealed sales activity in the year overall, finding that home sales totalled nearly 456,800 transactions, up more than 2 percent from 2010. Morse noted real estate market observers can expect more of the same in 2012.
"While buyers have become increasingly cautious, the hand off for sales activity going into the New Year suggests that Canada's housing market will continue to benefit from low interest rates in 2012, and continue making a significant contribution to Canadian economic activity."
Early indications of mortgage rates suggest this to be true, as two of Canada's leading lenders - Scotiabank and the Canadian Imperial Bank of Commerce - have recently lowered their mortgage rates. At both Scotiabank and CIBC, fixed rates for a four-year mortgage averaged 2.99 per cent this week.
Many experts have said consumers should be sure to enter the mortgage process knowing what they can afford and get preapproved before house-hunting. The current low mortgage rates may be giving some families added buying power.
Recent polling conducted by CIBC indicates a considerable number of Canadians have made paying down debt their top financial priority for 2012. Colette Delaney, senior vice president of mortgage, lending and insurance said today's rates should help individuals achieve their resolutions.
"We know Canadians are focused on effective debt management as part of their overall financial plans," said Delaney. "[Affordable] mortgages will help new homebuyers and existing mortgage holders reduce interest costs and pay down their mortgage sooner."
Borrowers may be further assisted by the fact that home price increases have been modest. CREA reports the national average selling price for home in December was approximately $347,800. This is just 0.9 per cent above the average selling price during the same month in 2010, making it the smallest year-over-year rise in 2011.
Gregory Klump, chief economist at CREA, noted that while there's been a considerable amount of momentum in national sales activity, the pace has slowed. This is particularly true among luxury properties, contrasting sharply with the beginning of 2011 when high-end home sales spiked.
He added that thanks to interest rates which are anticipated to remain low throughout the balance of 2012, homeownership will be something many people will be able to achieve, helping to keep the country's real estate industry in a healthy state.
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