WRAPUP 1-Canadian resale housing lands safely, prices up

* TD Bank revises 2011, 2012 resale sales forecasts

* New home prices rise 0.1 percent in October, as forecast

By Ka Yan Ng

TORONTO, Dec 9 (BestGrowthStock) – The Canadian residential housing
sector is landing safely after a wild ride over the past three
years, Toronto-Dominion Bank said in a report on Thursday.

Looking ahead, the economics unit of Canada’s No. 2 bank
said it expects improved home sales and a higher average price
next year, largely because housing affordability will likely be
extended as uncertainty lingers about the global economy.

“The most important development since our September
forecast is that increases in borrowing rates foreseen three
months ago by TD Economics and most forecasters have been
delayed,” said Pascal Gauthier, senior economist, at TD Bank.

The bank raised its annual home sales forecast for 2011 by
8 percent to 420,000 units, but that still stands lower than
its 2010 forecast of about 455,000.

It also downgraded its 2012 forecast to 400,000 units from
a previous view of 437,000.

The TD Bank report follows Tuesday’s decision by the Bank
of Canada to keep its key overnight interest rate at 1 percent,
which set the stage for rates to stay on hold for some time. TD
expects the central bank to start ratcheting up interest rates
in the middle of next year.

Overall, the Canadian housing sector has avoided two
extreme scenarios over the past three years when resale prices
dropped sharply in 2008, then quickly rebounded as mortgage
rates and lower prices supported the turnaround.

“Sidestepping both worst-case scenarios of a bubble and
crash, the resale market appears to have landed safely, and
somewhat earlier than we anticipated three months ago,” said
Gauthier.

Recent data has showed the housing market was moving
towards more balanced conditions.

NEW HOME PRICES RISE

Separately, new home prices in Canada edged higher by 0.1
percent in October from September, for the third consecutive
gain, according to Statistics Canada data released on
Thursday.

The top contributors to the rise in the new housing price
index were Toronto and Oshawa, Ontario, and Vancouver, British
Columbia. Prices rose in eight of the 21 cities in the index,
were unchanged in nine and edged down in four.

The index has been on a steady rise since July 2009 with
only one monthly decline since then.

Analysts in a Reuters poll had forecast, on average, a 0.1
percent increase in the October index.

Compared with October 2009, prices were up 2.5 percent,
easing slightly from a 2.7 percent year-over-year gain in
September.

The housing-only component of the new housing price index
rose 0.1 percent in the month, while the land-only component
was flat.
(Additional reporting by Louise Egan and Howaida Sorour in
Ottawa; editing by Rob Wilson)

WRAPUP 1-Canadian resale housing lands safely, prices up