Canada's existing-home sales will reach a record for the sixth straight year in 2006, as low unemployment and rising incomes boost demand, the Canadian Real Estate Association said.
Sales of existing homes, which account for about two-thirds of all home sales, will increase by 32 units in 2006 to 483,265, the association forecast today. Prices will rise 11 percent in 2006, the group said.
``High employment, upbeat consumer confidence and rising incomes continue to keep the fundamentals strong for housing activity in Canada,'' Gregory Klump, the association's chief economist, said in a statement.
The realtors' prediction supports the Bank of Canada's view that housing will contribute to growth in 2006. The central bank said in July that consumer spending and business investment will spur economic growth of 3.2 percent for the year, with 0.2 percentage point coming from housing.
Today's forecast, while for a record, is lower than one released in May, in which Klump predicted sales would rise to 488,160 units this year. Sales are cooling because of higher prices, Klump said today. That trend will continue in 2007, leading to a 4.8 percent decline in sales and a 6 percent increase in prices, he said.
bloomberg.com
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