Canada Biggest Jump in New Home Prices Since Jan08

New data released yesterday (Thursday) by the federal agency Statistics Canada (Statscan) showed new home prices rising in September faster than at any time since the beginning of 2008. The positive reading of 0.5 percent surprised market observers and is yet another in a string of recent indicators reflecting on the country's strong housing market.

As a result the year-on-year decline in prices eased from 3.1 percent in August to 2.7 percent in September.

Vancouver and Ottawa-Gatineau lead the way with 1.4 percent and 1 percent rises respectively while Windsor, Ontario recorded the biggest decline. Statscan said the jump in the new housing price index was largely due to improving market conditions and consumer confidence.

n the same month permits for housing construction jumped 9.4 percent and the federal housing agency CMHC is looking for a 26 percent rise next year in Toronto.Stewart Hall, markets strategist at HSBC Canada said sales were above pre-crisis peak levels, citing pent-up demand and rock-bottom interest rates as market drivers. Writing to clients he reported "Real estate has been the economic surprise of 2009....Today's new home price data seems to be pointing to an inflection point."

Thomson Reuters noted that the 0.5 percent rise beat the forecast of every single one of 15 analysts polled.

However housing market buoyancy is not yet reflected in other sectors of the economy, with some recent data questioning a wider economic recovery, and throwing into doubt the Bank of Canada's prediction of 2 percent annual growth in the third quarter.

Exports are expected to be weak, and a second Thomson Reuters poll is predicting a merchandise trade deficit of C$1.75 billion in September. We will soon see if the trade figures, due out later today, will follow housing and surprise to the upside. Even weakness in this sector could add to house-buying momentum if it persuades the Canadian Central Bank to delay interest rate rises.

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Top 10 most Popular Overseas Property Destinations in October

It is amazing the difference that the foreign exchange rate currently makes to the popularity of an overseas property destination. In October Turkey property became the third most popular with those searching for property on Property Abroad.com -- a climb of 3 places on the previous month.

It is surely no coincidence that the pound spent most of October really weak against the Euro, and strong against the Turkish Lira -- especially when you look at previously monthly charts showing the same results.

America and Spain held their positions in 1st and 2nd, and Greece retained its position in 4th. This left France down two places as 5th most popular in October.

Germany is another surprise; climbing two places to steal 6th most popular in October, putting Portugal back to 7th after being 5th most popular in September.

But the biggest surprise has to be the return of Canada to the chart in a very respectable 8th position. Canada has always been one of the favourite locations for Brits to emigrate, but because of the recent positive data on the Canadian housing market, this has to be considered as signalling increasing interest in Canada property from foreign investors.

Finally Cyprus held the same 9th position as in September, and Italy was in 10th having fallen back 3 places from being 7th most popular in September. The full results -- with September's position in brackets -- are as follows.

America (1)
Spain (2)
Turkey (6)
Greece (4)
France (3)
Germany (8)
Portugal (5)
Canada (NE)
Cyprus (9)
Italy (7)

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