"Sales activity in 2009 came in like a lamb and went out like a lion," 

Toronto developer Jim Ritchie thought his biggest challenge last year would be persuading consumers to purchase his condominiums during the recession.

But it turned out his main problem was getting new developments to market quickly enough to satisfy demand.

"There was very little activity for six months, and then things just started to take off," said the senior vice-president of condominium developer Tridel Corp.

Tridel had shelved projects at the beginning of the year only to scramble six months later to take advantage of a market ignited by low interest rates. Another factor has been spillover demand from the existing homes market and increased consumer confidence.

The strongest December in history for sales of existing homes helped power the Canadian real estate market to a strong finish in 2009.

The Canadian Real Estate Association reported Friday that 27,744 homes traded hands in December, up 72 per cent from a year ago.

"Sales activity in 2009 came in like a lamb and went out like a lion," said CREA president Dale Ripplinger.

The average national residential price was $337,410 in December, up 19 per cent year over year.

On an annual basis, prices were up 5 per cent to a record $320,333. Sales rose 7.7 per cent, representing the fourth-best year on record.

In the Toronto market, existing home sales bettered 2008 by 17 per cent, while the average price of a home gained 4 per cent to $395,460.

Like many developers, Tridel had been expecting a slowdown in 2009, but Ritchie said sales have increased by about 15 per cent.

The company launched four projects last year and virtually all sales occurred in the second half of the year.

Another project, the Hull-Mark Centre in North York, which would likely have been shelved under earlier projections, is to be launched next week.

The developer's outlook has been helped by a lack of inventory in the resale home market that has contributed to buyers moving into the new home market.

Friday's powerhouse numbers meanwhile, did nothing to quell the concerns of some economists who say the market is looking a little frothy.

"Canadian home sales just continue to roll right along even in the face of stern warnings from policy-makers, pundits, all and sundry," BMO Capital Markets Economist Doug Porter said Friday.

Porter warns the market is not in "full-blown bubble territory quite yet ... with an emphasis on yet."

The economist said the market could continue to be heated with "a risk of further sales and price surges in the coming months ahead."

Ritchie, meanwhile, said he doesn't see a bubble.

"I haven't seen prices and values increasing to such a point that they would collapse," he said.

"The Toronto market has been incredibly resilient."

Some economists have said that Toronto-area housing prices are already overvalued by up to 6 per cent based on demographics and historical valuations.

But some steam may already be coming out of the market, which could help avoid a correction.

In December new listings rose 4.8 per cent from the previous year, the first year-over-year gain in 12 months.

Toronto Star

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