Thursday, September 15, 2011

CREA report could show August market turmoil affected monthly home sales

Investors are bracing for word on whether August's stock market volatility put a damper on Canadian housing sales for the month.

The Canadian Real Estate Association is set to release figures for existing home sales later this morning.

Economists are expecting a 14 per cent spike in sales volumes from a year ago and say prices will rise by 7.5 per cent.

Strong housing sales in the second quarter had previously prompted CREA to revise its 2011 home sales projections upwards.

Initially, the real estate brokers group had predicted they would decline one per cent from 2010 levels.

But August was a month of wild swings on most major markets, including the Toronto Stock Exchange, and the effect on the real estate market is not yet known.

U.S. government debt negotiations and fears of an economic meltdown in cash-strapped European countries saw the TSX drop below 12,000 points and fall off more than 10 per cent from highs set in early March.

Analysts say the Canadian housing market has continued to grow despite a slowing national economy — mainly because of low mortgage rates and strong job growth, especially in western Canada.

Source: The Canadian Press

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