A thriving economy continues to drive housing sales across the country, especially in the booming Ontario, British Columbia and Alberta markets.

In Canada's largest metropolitan centre, low interest rates are a key reason why demand continues to grow. The Toronto Real Estate Board (TREB) also cites housing affordability, well-paying jobs and secure employment as other factors.

"People dream about owning their own home," says Ron Abraham, TREB president. "And it's good-paying jobs, and low interest rates that are helping to make that dream a reality.

"(Home) prices continue to rise, but salaries are rising, too."

The TREB reports that 83,501 single-family dwellings changed hands in 2004, a six- per-cent rise from the 78,898 sold in 2003. Abraham adds that 2004 prices jumped seven per cent to an average $315,231 from the previous year.

The Canada Mortgage and Housing Corp. (CMHC) is also bullish about the city's real estate scene.

"We're looking at a much healthier market in terms of the supply-demand ratio," says Ted Tsiakopoulos, CMHC senior market analyst for Toronto.

He says the average amount of household income used to pay down mortgages in Toronto has crept up slightly in recent years. Today, roughly 35 per cent of household income is absorbed by housing payments.

"Affordability is eroding somewhat, but compared to 15-20 years ago it's looking pretty good," Tsiakopoulos says.

The CMHC anticipates the average house price in Toronto will rise to around $330,000 this year, a five-per-cent increase over 2004. However, the Crown corporation projects that unit sales will dip by around two per cent to 82,000 in 2005.

While Abraham puts a lot of faith in the CMHC forecast, he's not convinced unit sales will fall, based on January results. "Our initial statistics put (unit) sales higher than last year - we're up about 18 per cent," he says.

In its own survey, Re/Max says national home sales are expected to climb by two per cent to 477,800 units by year-end. The average price should increase by about six per cent, bringing the value of a Canadian home to $237,900 in 2005, which would top 2004's record of $224,729.

The Western Canadian housing market should be particularly strong, Re/Max says.

"Alberta certainly stands to benefit from strong global demand for crude at close to $50 US a barrel," Elton Ash, vice-president and regional director for Re/Max of Western Canada, said in a news release. "Foreign demand is also expected to bolster coal-mining projects in British Columbia."

(John Ludwick can be reached at ludwick@businessedge.ca)