OTTAWA — The average selling price of a home in Vancouver shot up to $383,000 in November confirming the city’s status as Canada’s priciest real estate market, a new report shows.

The Canadian Real Estate Association reported Wednesday that while Vancouver is the most expensive, other markets appear to be just as hot with Calgary, Edmonton, Winnipeg, Toronto, Hamilton and Ottawa having surpassed all previous sales records.

Nationally, the average selling price for an existing home hit $249,847 in November and a recent decline in mortgage interest rates will help keep the hot market from cooling off too much in the coming year, said J.P. Morgan Canada economist Ted Carmichael.

Carmichael noted that the benchmark one-year rate fell this month to 4.8 from 5.0 and the five-year to 6.05 from 6.5.

And there are signs that Vancouver‘s market is cooling despite the increase in average house-resale price, said Tsur Somerville, director of the Centre of Urban Economics and Real Estate at the University of B.C.‘s Sauder School of Business.

Somerville said Vancouver Multiple Listing Service-recorded resales dropped 16 per cent while the number of listings increased by 9.4 per cent.

“These are consistent with a weakening of the market, but in the case of Vancouver, we can translate that into achieving an equilibrium stability,” Somerville said.

“Because what has happened in the last two years [in Vancouver] is not a stable market.”

He added that sales numbers are a better gauge of what the market is doing because average prices can be influenced by the types of housing being sold in a given month.

“If 10 big west-side homes sold, and last month 10 smaller, tear-down sold, you would get a big price increase, but that wouldn’t be reflective of what is necessarily happening,” Somerville said.

After adjusting for seasonal ups and downs, sales of existing homes rose 1.4 per cent in November from October to 25,558, the highest level on record for the month of November. Sales so far this year were up 2.6 per cent over a year earlier.

While the number of homes up for sale also reached a high for the month, new listings were down from October, which when combined with the increase in sales, caused housing markets to get tighter, adding to price pressures.

The average price paid for a home last month was 6.2 per cent higher than a year earlier, and more than 20 per cent higher in a few cities, including Ottawa and Sudbury, Ont.

“Dollar volume, unit sales and average price remain on track to set a new annual record,” said real estate association chief executive officer Pierre Beauchamp.

And the housing market should remain strong into 2005 now that the Bank of Canada’s plan to raise interest rates further has been suspended, added association economist Gregory Klump.

“The bank should keep interest rates steady until at least the spring, taking its time to gauge the impact on the economy and job growth from the rapid rise in the Canada-U.S. currency exchange rate,” Klump said.

However, a lot of pent-up demand for homes has already been released as former renters are now homeowners, he said, predicting a more balanced market next year with more moderate price increases of three to five per cent.

RISING PRICES

Greater Vancouver remain’s Canada‘s most expensive real estate market, but others are also on the rise. Here’s a list of average selling prices and percentage change from a year ago.

Greater Vancouver

$383,343: 8.4%

Calgary

$229,114: 3.5%

Edmonton

$181,630: 8.7%

Montreal

$200,837: 11.7%

Ottawa

$268,772: 20.9%

Saskatoon

$139,169: 14.6%

Toronto

$318,837: 5.7%

Winnipeg

$124,317: 10.8%

© The Vancouver Sun 2004