Canada's major markets are becoming more balanced

Existing home sales activity in Canada’s major markets remained solid in the third quarter of 2006, according to statistics released by The Canadian Real Estate Association.

The housing market continues to become more balanced, which is resulting in smaller price increases. Year-to-date sales activity remains slightly ahead of levels recorded for the first nine months of last year, and is on track to set a new annual record in 2006.

Seasonally adjusted home sales activity via the Multiple Listing Service ® (MLS ®) in Canada’s major markets totaled 82,119 units in the third quarter of 2006 – down 2.5 per cent compared to the second quarter.

The quarterly decline in sales activity was biggest in Vancouver, Calgary and Toronto, but was partially offset by a quarterly increase in transactions in Edmonton, Hamilton and a number of other major markets. Sales activity in Edmonton and Thunder Bay reached the highest level of any quarter on record.

Actual (unadjusted) sales activity in the third quarter of 2006 eased by 6.2 per cent compared to the third quarter of last year. Transactions for the year-to-date in September were 0.7 per cent ahead of levels recorded for the same period last year. New sales records for the year-to-date in September were set in a number of major markets, including Calgary, Edmonton, Saskatoon, Winnipeg, Ottawa and Montreal.

On a seasonally adjusted monthly basis, some 27,220 homes traded hands via the MLS ® in September – just 1.6 per cent fewer than for the previous month. Sales reached the highest monthly level on record in Edmonton.

Seasonally adjusted MLS ® residential new listings in Canada’s major markets numbered 143,760 units in the third quarter – an increase of 3.8 per cent compared to the previous quarter. This was also the highest level in more than 15 years, and the second highest level for any quarter on record. New listings reached the highest level of any quarter on record in Calgary and Edmonton, and the second highest level on record in Toronto and Montreal.

New listings continued to rise in September, posting gains compared to each of the two previous months. The quarterly decline in sales combined with an increase in new listings caused the resale housing market to become more balanced than in any other quarter in the past 5.5 years.

The MLS ® residential average price in Canada’s major markets was $294,245 in the third quarter 2006 – up 10.1 per cent from levels recorded for the same quarter one year ago. Average price surpassed all previous quarterly records in many major markets, including Vancouver, Calgary, Edmonton, Saskatoon, London, Kitchener, St. Catharines and Sudbury.

“Canada’s housing market continues to head for a soft landing,” said CREA Chief Economist Gregory Klump. “With the housing market becoming more balanced, price gains are slowing down in a number of major markets. CREA’s October 2006 forecast indicates those trends will continue over the rest of the year and in 2007.”

“Solid market fundamentals remain in place, including h igh levels of employment, upbeat consumer confidence and rising incomes ,” said CREA President Alan Tennant, FRI. “Consumers should consult with their REALTOR® to gain a full understanding of local market conditions.”

MLS ® Major Market Residential Summary:
Third Quarter 2006

MLS ® Major Market Residential Summary:
September 2006