Most economic experts and market analysts are predicting relatively strong economic prospects for Canada as leading indicators show early signs of positive performance. This positive shift is mainly market driven. Low interest rates have been propping up demand despite lingering external pressures. As consumer confidence continues to grow, we are expecting a more robust real estate industry. Home prices will continue to rise as activities in real estate markets will continue to heat up. The market is expected to reach its equilibrium with the slow decline in affordability. This unfolding scenario is mainly due to higher price levels of homes and the anticipated increase in interest rates by the second half of the year.
Most real estate markets in Canada are riding at the crest of a strong finish last year. The lowering of borrowing cost has spurred consumers to buy. This has driven demand in most parts of last year. This vibrant atmosphere in most markets in Canada has pushed economic activity levels to a new high. The increasing demand, coupled by the seasonal dip in inventories in most real estate markets, will continue to push home prices up in the early part of this year. As soon as the market makes the adjustment and supply reaches normal levels, demand will ease since homeownership will be moderated by the increasing price levels.
This positive outlook and stable economic climate are a far cry from what we have experienced during the worst episode of the recession. Things are now in positive territories in regions like the Lower Mainland, B.C. and Toronto. Vancouver has posted hefty gains during the last quarter of 2009. The house prices averages during the last 3 months has topped the figures of the previous 3 quarters of the year. The average price of a detached unit increased by 6% compared to the same period in 2008. On the other hand, the average price of condo units also posted 6.4% increase for the same period. The first 2 quarters of 2009 saw a continued decline in home price averages. It was only during the third quarter where we saw a turnaround in the trend of home prices.
Real estate markets in Montreal and Halifax have posted positive gains in all housing categories. This condition has led to some difficulties in the supply side with the decline in house inventories during the second half of 2009. This has pushed the average home prices with the most affordable ones posting the highest increase in prices. Real estate markets will again enter positive territory as more investors will cash in on this positive development.
The housing sector is leading the way as it is considered by most experts as the main beneficiary of the economic stimulus. With the restoration of consumer confidence, Canadians are looking at real estate properties as potential investment options rather than just depreciating assets. Expectedly, the regions that posted the highest gains are those with that have lower averages in home prices. These include Winnipeg and several areas in Atlantic Canada.
Economic experts expect interest rates to ease by the second half of the year. This event will give rise to a more stable market condition as demand will finally come into balance with supply. We shall also see some growth in the number of properties being listed for sale as more and more Canadians become interested in large transactions such as home buying.