Markets for resale housing have rebounded sharply in nine Canadian cities, TD economists reported Wednesday.

TD economists say housing resales in Canada rebounded 61% during the first eight months of 2009. (CBC)

Their report said the number of home resales, after dropping by nearly a third in the last six months of 2008, climbed back 61 per cent from January through August. The economists attribute the bounce back to pent-up demand, lower prices and low interest rates.

The report looked at markets in Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Toronto, Ottawa, Montreal and Halifax.

"We estimate that between 45,000 and 53,000 sales that would normally have occurred in [the last three months of] 2008 did not, because of the fear and uncertainty created by the financial market turmoil," the report said.

After the dust settled and it became clearer that the economy was not tilting into deflation and depression, potential buyers had another look.

What they were looking at in most markets was an incredible window of opportunity: an environment in which price concessions had been made and where mortgage rates were at rock bottom low levels."

TD predicts that demand will level off by November and that more homes will come on the market and prices will rise only modestly the rest of 2009 and through 2010.

TD expects rising prices in 2011 will weaken demand but, as more houses will come on the market, the rate of price increases will ease.