National resale housing market further stabilizes

OTTAWA, Oct. 15 /CNW/ - National resale housing activity edged higher for a second consecutive month in September 2010, according to statistics released by The Canadian Real Estate Association (CREA). Combined with a falling supply of homes on the market, the number of months of inventory also declined for the second consecutive month.

Seasonally adjusted national home sales activity via the Multiple Listing Service(R) (MLS(R)) Systems of Canadian real estate Boards was up three per cent month-over-month in September 2010. Building on a monthly increase in sales activity in August, sales in September reached their highest level since last May. Two-thirds of local markets posted monthly increases in seasonally adjusted activity, led by Winnipeg, Calgary, and Montreal.

Actual (not seasonally adjusted) national sales activity in September 2010 came in 19.8 per cent below last year's record for the month, but stands only slightly below September sales in the previous three years. Record level sales activity late last year and earlier this year is expected to further stretch year-over-year comparisons in the months ahead.

The number of new residential listings on Canadian MLS(R) Systems was little changed from August levels, edging up seven tenths of one per cent on a seasonally adjusted basis. New listings remain 15 per cent below the recent peak reached last April.

"Supply and demand are rebalancing, and that's keeping prices steady in many markets," said Georges Pahud, CREA's President. "Local and national housing market conditions often differ, so home buyers and sellers should consult their REALTOR(R) to understand how sales, inventory and pricing trends are shaping up in their market."

The national price trend continues to stabilize. At $331,089, the national average price remained on par with where it stood one year ago. September marks the second consecutive month in which average price remained even with year-ago levels.

Weighted average price trends are also moderating. The national weighted average price climbed three per cent on a year-over-year basis in September 2010, marking the sixth month of diminishing gains. Similarly, the residential average price in Canada's major markets rose 1.3 per cent year-over-year, while the weighted major market average price rose 5.7 per cent. The national (or major market) weighted average price compensates for changes in provincial (or major market) sales activity by taking into account provincial (or major market) proportions of privately owned housing stock.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 6.6 months at the end of September on a national basis. This is down from 6.9 months in August, and 7.2 months in July.

"Mortgage lending rates eased in the third quarter, which helped support sales activity over the past couple of months," said Gregory Klump, CREA's Chief Economist. "Interest rates are going nowhere fast, so home ownership will remain within reach for many homebuyers."

"Since Canada's interest rate outlook is tied to a weakening outlook for economic and job growth, consumer sentiment will remain under pressure until economic prospects improve next year. In the meantime, many Canadians will be focused on paying down their debts in anticipation of interest increases next year. That means the continuation of low and stable interest rates is unlikely to cause housing demand or prices to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time."

PLEASE NOTE: The information contained in this news release combines both major market and national MLS(R) sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS(R) is a co-operative marketing system used only by Canada's real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry trade associations, representing more than 100,000 REALTORS(R) working through more than 100 real estate Boards and Associations.

Further information can be found at http://www.crea.ca/public/news_stats/media.htm and http://www.crea.ca/public/news_stats/pdfs/media_Oct15rpt_e.pdf

For further information: Linda Kristal, Director, Communications, The Canadian Real Estate Association, P: 613-237-7111 or 613-447-4532, E: [email protected]