Real estate recession over in Canada, report says

House hunters still waiting for prices to drop further before buying may have sat on the sidelines too long, according to a new report showing home values have recovered across Canada to where they were before the recent market drop.

Economists agree, saying the power has shifted to a seller's market in recent months, after the buyer's were in control for more than a year.

"(The) bounce back that began in early spring has made this recession one of the shortest on record for real estate," said the Re/Max "Bricks and Mortar Report" released Thursday.

The survey says values are ahead of record highs set in 2008 in seven of the 11 markets surveyed for the brokerage network.

The national average price was $312,585, up 0.5 per cent from a year ago.

Re/Max said low interest rates, pent-up demand, and improved affordability as a result of record low interest rates are behind the recovery.

"Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates," said Re/Max executive vice-president Michael Polzler.

"Those who missed the boat in years past have found that sitting on the sidelines can be a costly move."

Polzler said home prices are rising and the number of properties for sale is tightening.

The survey shows home values were up the most in Newfoundland and Labrador, by 18.1 per cent from January to August to an average of $203,584, followed by a 6.4 per cent rise in Regina to $244,088 and a 3.5 per cent rise in Halifax-Dartmouth and Winnipeg, to $239,633 and $207,006 respectively.

Values in Ottawa were up 3.3 per cent to $301,684, and up 0.3 per cent in Toronto to $385,978.

Sales are also soaring, up 14 per cent in Vancouver so far this year, followed by a 7.4 per cent rise in Victoria, 6.2 per cent rise in Edmonton and five per cent jump in Regina.

Sales were up a more modest 2.4 per cent in Ottawa in the period, followed by a 1.8 per cent lift in Toronto.

Toronto real-estate agent Darren Josephs said the market has "gone crazy" in recent months.

"It's the most frenzy I've seen in my 12 years in this business," Josephs said.

Most noteworthy for Josephs is the increase in demand for condominiums recently, many of which are attracting multiple offers.

Low interest rates are also enticing consumers to buy homes, Josephs said, despite the nation's rising unemployment rate.

He said today's market has done a complete turnaround compared to earlier this year, when sales had slumped following a global financial crisis that originated in the U.S. housing and mortgage industries.

"It's pent up demand. A lot of people were waiting to get off the fence, but were too afraid, until now," Josephs said.

The Re/Max report predicts sales growth to continue this year and into next year, however Scotiabank economist Adrienne Warren believes that outlook may be overly optimistic.

Warren believes much of the pent-up demand has played out by now, and expects a more "balanced market" towards the end of this year.

"Right now it's a seller's market just because we've had a pickup in sales, but we haven't had a pickup in listings," Warren said.

"A strong market brings in more listings. I would expect to see a pickup in listings and levelling off in demand, bringing us back to a balanced market over the next few months, but it will take awhile to get there."