- Existing home sales up 12.3 per cent from July 2010
- Sales should remain strong given low borrowing costs
TORONTO, August 16, 2011 – The resiliency of Canada’s housing market represents a positive surprise among 2011’s negative economic surprises, according to Douglas Porter, Deputy Chief Economist, BMO Financial Group. Mr. Porter was commenting on today’s release of the Canadian existing home sales numbers, which rose 12.3 per cent from year-ago levels in July and held steady from the prior month.
“Canadian housing remains surprisingly robust, thanks to still-low interest rates and solid job growth,” said Mr. Porter. “While the strong year-over-year growth is flattered by a weak year-ago comparison – when the HST was introduced in B.C. and Ontario – sales are certainly faring better than what we expected earlier this year. While new listings have also risen recently, the backlog of unsold homes just nudged up last month, almost bang on the long-run average.
“The recent financial market turmoil may temporarily weigh on activity, but sales should ultimately find support from continued exceptionally low borrowing costs.”
"Today’s data release is yet another sign that Canada’s real estate market has great resiliency,” said Laura Parsons, Mortgage Specialist, BMO Bank of Montreal. “As long as consumers continue to push demand, which remains the case, we see ongoing strength in the housing market across the country.”
Ms. Parsons counseled Canadians to consider a shorter amortization period in order to become mortgage free faster. For instance, BMO offers a low 5 year-fixed rate mortgage with a maximum 25-year amortization at 3.79 per cent. She also noted that stress testing your budget using a mortgage payment based on a higher rate can help avoid nasty surprises in the future should interest rates rise.
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