The Canadian Real Estate Association (CREA) has revised its forecast for sales and prices for the rest of this year and into 2010 due to a combination of low interest rates and sensible pricing creating an overall sense of optimism for the coming months.

Its research showed that Alberta in particular has seen a remarkable turnaround. And overall sales activity in August set a record with the average price across the country now up +11.3% from a year ago.

For Alberta, the association has forecasted that now overall residential sales will decrease by -2.5% this year to 55,000 units and increase by +10.5% in 2010 to 60,750 units. This is in contrast to its last forecast in May when it sales would drop by -24.7% in 2009.

CREA has also forecasted the average sale price this year in the province will decrease by -4.4% to $337,300 and rise by +1.7% next year to $343,200. In May, its forecast was for an -8.8% decline this year to $321,900 and for a -1.1% decrease in 2010 to $318,300.

The Canadian Government has committed to leave rates unchanged until June 2010. However a new survey from Royal LePage Real Estate Services, found more than a quarter of its agents do not believe the housing market’s current strength is sustainable