Canadian existing homes sales soared in June, up 17.9 per cent year over year to 54,416 units, according to the Canadian Real Estate Association in a report yesterday.

The national average sale price also reached new heights on a monthly basis, climbing 3.6 per cent year over to $326,613.

On a quarterly basis, sales in the second quarter were up 1.4 per cent, marking the first year over year increase in such activity since 2007.

The solid numbers beat consensus estimates by analysts and took some mar­ket watchers by surprise.

“Canada’s housing market looks to have managed the equivalent of the great escape from the clutches of a lengthy, painful downturn,” said BMO Capital Markets economist Doug Porter. “The rapid fire rebound in Canada’s housing market is the most astonishing economic development of 2009.”

A jump in five-year mortgage rates in June also may have been a contributing factor to the boom. Posted rates at some banks went to 4.49 per cent from 3.79 per cent that month.

That mini-bump in demand, combined with less inventory has put pressure on prices, despite the fact Canada is officially in recession. However, analysts warned the months ahead could be more vola­tile as the effects of the recession linger.

The Canadian Real Estate Association has forecast a 5.2 per cent average price decrease by the end of 2009 compared with 2008. But, based on improving conditions, the association now expects sales transactions in the second half will exceed the first half.

Analysts also expect pressure on prices to ease as more listings come onto the market in the second half.