Canadian existing home sales rose to the highest in more than four years in June on gains in Vancouver and Montreal, a pace realtors said may slow in coming months after a burst of buying followed a winter chill.
Sales rose 0.8 percent to 41,186 in June, the fifth straight monthly increase and the most since March 2010, the Canadian Real Estate Association said in a statement today from Ottawa. The average price rose 6.9 percent to C$413,215 ($385,138) from a year earlier on a non-seasonally-adjusted basis and sales have gained 11.2 percent over that time.
Housing market data from building permits to new construction is showing renewed momentum, defying expectations of a slowdown following warnings from policy makers about the risks of record household debt burdens. The lowest mortgage rates in decades are also luring buyers.
“In markets with tight supply and strong demand, the strength of sales in recent months reflects how many properties were snapped up once they finally hit the market, said CREA chief economist Gregory Klump. ‘‘Because the impact of deferred listings and sales has likely run its course, activity over the second half of the year may not be able to maintain the kind of pace we have seen.’’
Vancouver sales rose 6.4 percent in June from May, bringing the 12-month advance to 29.4 percent, according to the report. Montreal sales rose 5.5 percent on the month and 3.4 percent on the year. In Toronto, Canada’s most populous city, sales rose 0.9 percent and 12.3 percent.
Optimism about real estate is the highest in more than six years, with 47 percent of Canadians predicting home prices will rise, according to polling last week by Bloomberg and Nanos Research Group.
The optimism isn’t universal.
Homes are about 20 percent overvalued and policy makers may need to take more steps to cool the market, Vanessa Purwin, Fitch Ratings Ltd.’s senior director of U.S. structured finance, wrote in a report yesterday.
Finance Minister Joe Oliver and Bank of Canada Governor Stephen Poloz have said record consumer debt poses a risk to the economy. They also anticipate a soft landing thanks to past measures to restrict some types of lending.
Housing market remains ‘‘balanced” and the average price gain has been lifted by Toronto and Vancouver, the realtor group’s report said. Excluding those markets, prices are up 5.2 percent over 12 months through June.