CREA reports that 2007 of existing home sales sailed to another rrecord

CREA reports it's Another press announcment that existing home sales soar to record in 2007

But demand slumped at the end of the year, signalling a rough start to 2008; average price also hits a new high

The value of existing home sales blew past $100-billion for the first time in 2007, but signs of fatigue late in the year are expected to carry into 2008.

Sales came in at a total of $118.3-billion last year, up 20 per cent from the year before, according to data released yesterday by the Canadian Real Estate Association (CREA).

The average price of an existing home also hit a record $326,055 last year across the 25 major markets tracked by CREA.

Sales peaked in the second quarter, and slowed near the end of the year because there were fewer transactions in Calgary, Vancouver, Ottawa and Montreal, according to CREA. Calgary had the biggest drop in unit sales in December, down 27.8 per cent, compared with the year before.

Some of the country's strongest markets in the latter part of 2007 were Regina, Saskatoon and the province of Newfoundland and Labrador, where year-over-year sales rose 54 per cent, 34 per cent and 27 per cent respectively.

While a sag in December sales activity will likely continue in 2008, the Canadian market is still in much better shape than that of the U.S., said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.

"Even with the slight sag in December, Canadian home sales still easily hit a new annual high last year, in staggering contrast to the deepening trauma south of the border," Mr. Porter said in a research note.

"Housing is very unlikely to provide as much support to Canadian growth in 2008, but it's also highly unlikely to follow the U.S. market's due-south lead either."

For example, a total of 362,934 units were sold in Canada last year, up almost 8 per cent from 2006. This stands in "stark contrast" to the estimated 12.6-per-cent drop in U.S. existing home sales in 2007, Mr. Porter said.

Home prices, which rose 10.8 per cent in 2007 from 2006, are expected to go up at a more modest rate in 2008, according to CREA.

"A decline in inflationary pressures due to slower U.S. economic growth will enable the Bank of Canada to reduce interest rates," said Gregory Klump, CREA chief economist. "Additional interest rate cuts this year will keep resale housing market activity on a strong footing, and prices will continue to rise but at a slower pace."

By the numbers

$118-billion

Total dollar value of residential sales.

362,934

Number of units sold in 2007.

$326,055

Average price of home in 2007.

587,607

Number of new listings in 2007

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