MLS® home sales set third quarter records
September second best month for home sales
Resale housing activity in Canada's major markets reached their second highest monthly level ever in September 2005, surpassed only by transactions the previous month. Sales activity also reached its highest quarterly level on record in the third quarter of 2005, according to statistics released by The Canadian Real Estate Association.
On a seasonally adjusted basis, the number of homes trading hands via the Multiple Listing Service ® (MLS ® ) in Canada's major markets in September numbered 29,544 transactions. This represents a decrease of 1.8 per cent compared to its peak in August.
Strong monthly sales were recorded throughout the third quarter of 2005. On a seasonally adjusted basis, a total of 88,357 homes traded hands via MLS ® in major markets in the third quarter of 2005 – an increase of 2.9 per cent compared to its previous quarterly peak in the second quarter of 2005.
Actual home sales numbered 266,114 units in the first nine month of 2005 – 4.1 per cent above the previous record for the same period set in 2004. On a seasonally adjusted basis, sales activity in the first nine months of 2005 was up 4.4 percent compared the same period in 2004. Driven by sales activity in Vancouver, Calgary and Edmonton, strong third quarter results pushed the activity for the year to date in September to its highest level on record for any nine month period.
Actual MLS ® residential new listings numbered 433,394 units in the nine months of 2005 – an increase of 4.0 per cent from the same period in 2004 and the highest level on record for the first nine months in any year.
“A bigger increase in sales than for new listings caused the market to tighten in the third quarter compared to the second quarter of 2005,” said CREA's Chief Economist Gregory Klump. “With demand still running strong, the major market MLS ® residential average price remains well above where it stood last year, and set new records for the month of September, the third quarter, and for the period from January to September.”
The major market MLS ® residential average price reached $271,479 in September– up 10.7 per cent from the same month last year. Year-over-year gains in the major market MLS ® residential average price stood above 10 per cent throughout the third quarter. The major market MLS ® residential average price rose 10.7 per cent year-over-year in the third quarter, and by 9.2 per cent for the first nine months of 2005 compared to the same period in 2004.
Average sale price hit its highest level on record for the month of September in almost every major market, and reached its highest quarterly level on record in a number of major markets including Vancouver and Montreal in the third quarter of 2005.
“The continuation of low interest rates have kept resale housing demand exceptionally strong throughout the third quarter,” said Klump. “Even now that short-term interest rates have begun to inch higher, they are still low and will do little to slow resale housing market activity. Combined with additional full-time job growth in the third quarter, resale housing demand will remain strong over the rest of the year and in 2006.”
To keep inflation under control, the Bank of Canada is expected to raise its trend-setting Bank of Canada rate gradually over the next year. Higher interest rates and resale housing prices are expected to result in only slightly softer housing activity next year.
“Homebuyers will continue to take advantage of low mortgage interest rates to invest in higher priced homes next year. Additional higher-priced home sales activity combined with fewer lower-priced homes available for sale will keep year-over-year average price increases near current levels over the next six months,” adds Klump.
Home sales will continue to be an important source of economic activity next year. Results of a recent study commissioned by the Canadian Real Estate Association suggest that resale housing activity can be expected to result in $10.8 billion in spin-off spending and the creation of more than 120,000 jobs next year.
CREA will update its MLS® residential forecast in November 2005. CREA's current national forecast was released in August 2005. The forecast predicts that annual MLS® home sales in 2005 will surpass last year's highest level on record by 1.1 per cent before edging lower by 3.3 per cent in 2006. The Association's current national forecast also predicts that the annual MLS® residential average price will rise by 9.5 per cent compared to last year, and by 6.5 per cent in 2006.
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 neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. (CREA 14/10/2005)
Resale housing activity in Canada's major markets reached their second highest monthly level ever in September 2005, surpassed only by transactions the previous month. Sales activity also reached its highest quarterly level on record in the third quarter of 2005, according to statistics released by The Canadian Real Estate Association.
On a seasonally adjusted basis, the number of homes trading hands via the Multiple Listing Service ® (MLS ® ) in Canada's major markets in September numbered 29,544 transactions. This represents a decrease of 1.8 per cent compared to its peak in August.
Strong monthly sales were recorded throughout the third quarter of 2005. On a seasonally adjusted basis, a total of 88,357 homes traded hands via MLS ® in major markets in the third quarter of 2005 – an increase of 2.9 per cent compared to its previous quarterly peak in the second quarter of 2005.
Actual home sales numbered 266,114 units in the first nine month of 2005 – 4.1 per cent above the previous record for the same period set in 2004. On a seasonally adjusted basis, sales activity in the first nine months of 2005 was up 4.4 percent compared the same period in 2004. Driven by sales activity in Vancouver, Calgary and Edmonton, strong third quarter results pushed the activity for the year to date in September to its highest level on record for any nine month period.
Actual MLS ® residential new listings numbered 433,394 units in the nine months of 2005 – an increase of 4.0 per cent from the same period in 2004 and the highest level on record for the first nine months in any year.
“A bigger increase in sales than for new listings caused the market to tighten in the third quarter compared to the second quarter of 2005,” said CREA's Chief Economist Gregory Klump. “With demand still running strong, the major market MLS ® residential average price remains well above where it stood last year, and set new records for the month of September, the third quarter, and for the period from January to September.”
The major market MLS ® residential average price reached $271,479 in September– up 10.7 per cent from the same month last year. Year-over-year gains in the major market MLS ® residential average price stood above 10 per cent throughout the third quarter. The major market MLS ® residential average price rose 10.7 per cent year-over-year in the third quarter, and by 9.2 per cent for the first nine months of 2005 compared to the same period in 2004.
Average sale price hit its highest level on record for the month of September in almost every major market, and reached its highest quarterly level on record in a number of major markets including Vancouver and Montreal in the third quarter of 2005.
“The continuation of low interest rates have kept resale housing demand exceptionally strong throughout the third quarter,” said Klump. “Even now that short-term interest rates have begun to inch higher, they are still low and will do little to slow resale housing market activity. Combined with additional full-time job growth in the third quarter, resale housing demand will remain strong over the rest of the year and in 2006.”
To keep inflation under control, the Bank of Canada is expected to raise its trend-setting Bank of Canada rate gradually over the next year. Higher interest rates and resale housing prices are expected to result in only slightly softer housing activity next year.
“Homebuyers will continue to take advantage of low mortgage interest rates to invest in higher priced homes next year. Additional higher-priced home sales activity combined with fewer lower-priced homes available for sale will keep year-over-year average price increases near current levels over the next six months,” adds Klump.
Home sales will continue to be an important source of economic activity next year. Results of a recent study commissioned by the Canadian Real Estate Association suggest that resale housing activity can be expected to result in $10.8 billion in spin-off spending and the creation of more than 120,000 jobs next year.
CREA will update its MLS® residential forecast in November 2005. CREA's current national forecast was released in August 2005. The forecast predicts that annual MLS® home sales in 2005 will surpass last year's highest level on record by 1.1 per cent before edging lower by 3.3 per cent in 2006. The Association's current national forecast also predicts that the annual MLS® residential average price will rise by 9.5 per cent compared to last year, and by 6.5 per cent in 2006.
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 neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. (CREA 14/10/2005)
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