MONTREAL — It’s still a seller’s market for homeowners, but economists say it’s not a real estate “bubble.”

Canada’s housing market is on the rebound after a decline in 2009 with resales expected to set a new annual record this year and home building is off to a strong start, according to two reports Monday.

There isn’t a bubble because of a lack of speculation in the real estate market, said Scotiabank senior economist Adrienne Warren.

Prices are being driven by more buyers than sellers, not unexpected with a tight supply, and buyers may be overpaying a little in some markets, she said.

“We don’t think there’s a bubble,” she said from Toronto.

By 2011, the market should be cooling off and modest price increases may be ahead for a number of years, Warren added.

The Canadian Real Estate Association is forecasting resales for homes will set a record in 2010, largely driven by activity in the first six months of this year.

Finance Minister Jim Flaherty has said he has seen no evidence of a bubble, but he has discussed measures to cool the housing market, including raising the minimum down payment requirement above five per cent, or reducing the maximum length a residential mortgage can be amortized from 35 years.

The resale housing market is expected to reach 527,300 units this year, up 13.3 per cent from 2009. This would be a new annual record, up 1.2 per cent above the previous peak in 2007, CREA said Monday.

“You are not hearing about a lot of speculative buying,” Greg Klump, the national real estate organization’s chief economist, said from Ottawa.

“Nor is there a lot of speculative building.”