on record in the first quarter of 2007, according to statistics released by The Canadian Real Estate Association. While resale housing markets in the United States have been weakening, Canadian markets are following a different trend and remain on solid ground. A seasonally adjusted* total of 129,219 homes were sold through using the Multiple Listing Service® in all reporting markets in Canada in the first quarter of 2007. This is an increase of 2.9 per cent over the previous quarterly record, which was set in the third quarter of 2005. Led by strong gains in British Columbia, Alberta, Saskatchewan, Ontario and Québec, sales activity was up by 6.9 per cent over levels recorded in the fourth quarter of last year.
New quarterly records for activity were set in Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, and Newfoundland and Labrador. Sales activity also reached the second highest quarterly level on record in Ontario and Nova Scotia.
Sales remained strong throughout the first quarter, but momentum showed tentative signs of easing as the quarter progressed.
On a seasonally adjusted basis, some 42,836 homes traded hands via the Board and Association MLS® systems in March 2007. This represents the third highest monthly level on record, and was down just 0.4 per cent from February 2007. March 2007 activity also came in just 1.3 per cent below the record set in January 2007. By contrast to the national trend, sales activity in Alberta, Saskatchewan, Manitoba, and Newfoundland and Labrador set new monthly records in March.
Seasonally adjusted new residential listings on MLS® numbered 204,270 units in the first quarter of 2007 – the second highest level for any quarter on record. This represents an increase of 1.2 per cent from the fourth quarter of 2006 and was just 0.3 per cent below the highest quarterly level on record, which was reached in the third quarter of 2006. New listings reached the highest quarterly level on record in Alberta in the first quarter of 2007.
Seasonally adjusted new listings numbered 68,800 in March. This is an increase of 3.0 per cent from 66,811 units listed in February, and the second highest level for new listings for any month on record.
The quarterly increase in new listings was unable to keep pace with the rise in sales activity, so market conditions became tighter in the first quarter of 2007. This caused the national MLS® residential average price to rise more quickly. Average price climbed by 10.0 per cent year-over-year in the first quarter of 2007 on a national basis, and set new quarterly records in British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick, and Nova Scotia.
The value of seasonally adjusted sales activity reached $38.1 billion in the first quarter of 2007 – an increase of 10.8 per cent from the previous quarter and the highest level of any quarter on record. This was the largest quarter-over-quarter gain in MLS® residential dollar volume in 3.5 years. New quarterly records for dollar volume were also set in every province.
On a monthly basis, seasonally adjusted dollar volume was valued at $12.7 billion in March, down just 0.1 per cent from the record reached in February 2007.
“The resale housing market remains remarkably strong throughout Canada,” said CREA Chief Economist Gregory Klump. “Tight markets make for sizable price gains, and the resale housing market is no exception. Sellers’ markets are tightest and price gains are loftiest in Western Canada. In keeping with that trend, CREA forecasts that price increases this year and next will be biggest in the Prairie Provinces and British Columbia.”
“The federal government recently raised the loan-to-value ratio requiring mortgage default insurance for the first time in 40 years, and now Canadians with a minimum 20 per cent down payment will be able to obtain a mortgage without paying the insurance,” said Ann Bosley, President of The Canadian Real Estate Association. The minimum down payment requirement was 25 per cent before April 20th.
“Rising home prices has had an impact on the ability of some Canadian consumers to save for a down payment on a home, and this change will make it easier for some home buyers to access home ownership. It will also ensure those consumers with smaller down payments will require the mortgage default insurance for a shorter period of time, which will add up to considerable savings in the long run,” said Bosley.
“A market adjustment for the maximum amount consumers can withdraw from their RRSP for a down payment under Home Buyers’ Plan is another change the federal government could make that would be beneficial to first-time home buyers,” added Bosley. “The current limit of $20,000 per individual has not been adjusted since the Home Buyers’ Plan was established in 1992, even though home prices and inflation have increased substantially since that time.” (CREA 25/04/2007)
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