Signs emerging of housing market recovery: Scotiabank

Canada's housing market is showing signs of getting out of its "winter hibernation" although conditions still remain tough, according to a new report from Scotiabank.

While average house prices were down almost eight per cent year-over-year, they showed signs of steadying in February and March, the bank said.

At the same time, demand is going up while new listings are down, which Scotiabank said is getting the market back into better balance.

"On an annualized basis, average home prices in early 2009 are running about six per cent below last year's levels, while sales volumes are down 16 per cent," said Adrienne Warren, a senior economist and real estate market specialist at Scotia Economics.

"This is tracking a slightly better performance than our forecast for a 10 per cent decline in average prices this year, and at the low end of our forecast for a 15 per cent to 20 per cent drop in sales," Warren said.

She cautioned not to expect a big resurgence in the housing market, however, pointing out that falling employment and a still-high level of listings will continue to weigh on prices and sales.