Housing sales boom to continue: Scotiabank
Spurred by rising interest rates
The prospect of rising interest rates will keep Canada's housing boom going this spring, a Scotiabank report predicted Tuesday.
The report predicted most regions of the country will remain sellers' markets for the first half of the year.
"I think you're going to have a very active spring market, probably some cooling off in the second half of the year," Adrienne Warren, the Scotiabank economist who wrote the report, said in a presentation Tuesday.
"We're looking at once in a lifetime interest rates that people are taking advantage of … but certainly confidence is coming back, the job markets are stabilizing," she said.
Scotiabank predicted 510,000 home sales this year, up 10 per cent from 2009, but just shy of the 2007 record. It expected the average price will increase by about eight per cent to a record $345,000.
Housing starts, Scotiabank expected, will reach 190,000, up from 149,000 last year.
Warren said the spring rush will also be helped by an influx of buyers hoping to avoid tighter lending rules for mortgages and the introduction of the harmonized sales tax in Ontario and B.C.
Economists expect the Bank of Canada to raise interest rates by between half a percentage point and a full point over several months beginning in late spring or early summer to fight inflationary pressures in the economy.
With files from The Canadian Press