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The worst may be over for western Canadian real estate, a report from one of Canada’s biggest banks suggests.

Alberta and BC have struggled in recent years as the former has had to weather the effects of a weakened energy sector while the latter faced a correction in the Vancouver area — but RBC Senior Economist Robert Hogue sees early signs of a recovery.

“They may not be completely out of the woods yet but markets in British Columbia and Alberta finally got going in May,” Hogue writes in a report responding to May housing data from the Canadian Real Estate Association (CREA).

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Hogue notes that home sales in May were up compared to April in Victoria by 10 percent, Calgary by 6.8 percent and Edmonton by 3.5 percent.

“These are the green shoots we have long been waiting for—early signs that the cyclical bottom has been reached in that region of the country,” Hogue continues.

“Market conditions are still soft, though,” he adds, referring to how home prices haven’t picked up and remain well below year-ago levels in the region’s major markets.

Vancouver home prices in May declined 8.9 percent on a year-over-year basis, while they fell 4.3 percent in Calgary and 3.7 percent in Edmonton over the same period.

“That said, the rate of decline moderated in Calgary and Edmonton which is a further sign that these markets are stabilizing,” Hogue says.

These developments bolster a national market that is already supported by Toronto, which is further along in the recovery process, and “solid conditions” in Ottawa, Montreal and Halifax.

In recent TD’s Canadian Quarterly Economic Forecast, the bank also highlights a stable housing market as one of the key drivers expected to boost the national economy’s growth this quarter.

“We forecast a pickup in the economic expansion in the second quarter. The key factors driving our forecast are healthy household income, a recovery in housing markets, and a resumption of export activity,” reads the report.

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