TSX tops 11,000 Green shoots begin to bloom: Condo sales are up; auto news is (a bit) brighter

Economy on the rebound TheStar.com - Business - Economy on the rebound
RICK MADONIK/TORONTO STAR FILE PHOTO
Green shoots begin to bloom: Condo sales are up; auto news is (a bit) brighter and

TSX tops 11,000
August 05, 2009
Tony Van Alphen
Tony Wong
Business Reporters

Fresh evidence of a rebounding Canadian economy surfaced yesterday in the form of encouraging sales figures in the Toronto condo market and surprisingly resilient July auto sales.

The good news comes on the heels of Bank of Canada Governor Mark Carney's declaration last month that Canada's recession would come to a screeching halt this quarter. And Prime Minister Stephen Harper said yesterday that he thinks the worst of the economic slump is behind us, even though signs of growth remain tentative.

Data from market research firm Urbanation Inc., shows condo sales here might have bottomed in the first three months of the year and rebounded in the quarter ending June 30. Condominium sales are a key barometer of the health of the new home market in Toronto.

Last year, condos represented almost half of all new home sales.

After three consecutive quarters of sliding sales, Toronto condo sales hit 2,963 units in the second quarter. That's up a massive 223 per cent from the dismal 917 unit sales in the year's first quarter. Sales are still down by 40 per cent, however, from the second quarter of last year when 4,962 units were sold.

"This is certainly better than most people had expected," Ben Myers, executive vice-president of Urbanation, said of the numbers. He said July numbers are also expected to be positive but cautioned there are still many units under construction, which could create a glut later this year and next.

In the auto sector yesterday, there was news that sales were down 6.4 per cent in July over the same month last year. It was the ninth consecutive monthly decline for the Canadian market, but it was the smallest drop over that time period.

Economist Carlos Gomes, an auto analyst with Scotiabank Group, said the July performance reinforces his firm's view "that an industry revival has begun." Ford Motor Company of Canada Ltd., posted a stunning 47.4 per cent peak in sales.

Investors had reason to be happy yesterday. Toronto's S&P/TSX composite index soared 230.95 points to 11,018.10, surpassing the 11,000 mark for the first time since Oct. 1, 2008. The market, which bottomed out at 7,566.9 on March 9, has risen by 45 per cent since.

With files from the Star's wire services