Canadians ask "Is now a good time to buy?" and record numbers continue to answer "yes" as they sign on the dotted line for a new or resale home. The professional response from real estate boards, real estate professionals, governments and other real estate experts remains cautiously optimistic as 2005 enters its last marketplace for the year and projections for 2006 begin to emerge.

According to Canada Mortgage and Housing Corporation 's (CMHC) third quarter Housing Market Outlook, residential construction will moderate in 2005, and reach 218,900 units, a decrease of over 6 per cent from 2004. In 2006, residential construction will continue to ease dipping 8.5 per cent to 200,200 units.

"The unanticipated decrease in longer term mortgage rates in the second quarter of this year will help invigorate the housing market," said Bob Dugan, Chief Economist at CMHC explaining why earlier 2005 projections were off. "Housing starts this year will be slightly stronger than previously forecast, but will not match last year's pace of over 233,000 units. While economic conditions will continue to favour high levels of new home construction, continued growth in house prices coupled with expected modest increases in mortgage rates will lead to a slight pull back in housing starts this year and next."

CMHC analysts report that real estate markets will not continue dramatic upward spirals, but will remain strong:

• Existing home sales, based on Multiple Listing Service (MLS) data, will remain near record levels in 2005, dipping slightly to 455,900 units. A rise in new listings will help keep resales strong in 2006, but a decline of almost 5 per cent is projected. The steady price increases of the past three years and the expected rise in mortgage rates will push mortgage carrying costs higher and will cause housing demand to ease gradually. Strong sales in 2005 will continue to create sellers' market conditions, as a result, the rate of increase in existing home prices will moderate only slightly to 9 per cent. However, in 2006, the resale home market is expected to become more balanced causing price growth to slow to under 5 per cent.

• Renovation spending will continue to advance strongly in 2006. Near record levels of sales of existing homes, a strong job market and low borrowing costs drive strong renovation spending, which will reach C$40.7 billion in 2005, an increase of 10 per cent over 2004. Experts expect an approximately 7 per cent increase in 2006 to C$43.6 billion. The strength in renovation spending will peak in British Columbia and New Brunswick.

• Condominium sales in Canada’s hottest market, the Greater Toronto Area, continue to drive increased sales, particularly in neighbourhoods outside Toronto’s city centre like Richmond Hill and Mississauga. The Toronto Real Estate Board credits condominiums with much of the increased sales activity especially the 15 per cent increase in transactions in North York where condos are the most popular type of housing. A Toronto-based CMHC analyst explained this pattern: "As the year-over-year growth in average resale price has remained above the general rate of inflation, we have seen increasing interest in more affordable multiple family homes, such as town homes and condominium units. These market segments will continue to be a key driver of sales going forward."

In spite of record-breaking price increases in many Canadian communities, not every property sells in a storm of competing offers. There are always deals to be had since buyers and sellers want very different things. The more flexible buyers are about closing date and their demands on sellers, the more receptive sellers may be when it comes to sale price.

"Sales activity in June and July show we have a real estate market that continues to keep pace with our economy," said Real Estate Board of Greater Vancouver President Georges Pahud. "While the realities of supply and demand are influencing housing prices, it's important to note that over 60 per cent of all sales recorded in July were below the average prices across all three residential property types. So while prices are increasing, there are many properties priced within affordable ranges."

All real estate statistics and forecasts must be approached skeptically since real estate is a very local commodity, not one sold on a homogenized national, provincial or even city-wide basis. Some reported price trends are derived from relatively low numbers of sales. For every pundit’s projection, there are numerous local deviations, and a range of price and location reactions.

Talk to local real estate professionals who concentrate on the neighbourhoods you’re considering to get feedback and projections directly relevant to the real estate you hold or expect to buy.