Canada’s economy is beginning to experience some of the turbulence from south of the border, but so far the housing market appears to be ending the year on a strong note. Existing home sales rose in November, leading to a yearly record in 2007. Bloomberg recently ran several reports detailing the situation in Canada.
The Canadian Real Estate Association’s Multiple Listing Service, which captures about 70% of all homes sold in Canada, indicates that sales rose to 29,992 units for the month. That brings yearly totals up to 345,577 homes sold for 2007 through the end of November. The previous record of 336,646 was set in 2005. These strong numbers indicate that the market in Canada has not seen the problems that the US market has.
In addition to the record number of sales, the average resale price rose 12% in November from a year earlier, bringing prices up to an average of $332,807 CD. While housing has remained strong, there are some indicators out of Canada that 2008 might not be as productive a year as 2007.
The Canadian dollar, which has recently been valued at more than the US dollar for the first time in decades, took a slight dip as the new year began. The Canadian currency, which had been on a steady upward climb for months, has fluctuated more in recent days. For the first week of 2008, it fell 2%.
The Canadian economy has been heavily dependent on commodities, with its oil and gold reserves providing a boost to the country. One result of that boom, though, is that more Canadian citizens have been spending their newly high valued money across the border where it goes a lot longer than in many years. Another problem is the reduced exports that will go the US, due both to the high currency rate and the slower economy in the US. All of these factors could lead to a slowing for 2008.
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