Canadian real estate markets set records in first-half '06

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Resale housing activity in Canada's major markets in the first half of 2006 set a new record for the first six months of any year, The Canadian Real Estate Association reported this week.

Sales activity is on pace to set a new annual record this year despite expected softening in the second half of the year, the association reported.

Actual unadjusted home sales via the multiple listing service in Canada's major markets totaled 186,177 units in the first half of 2006, a 3.6 percent rise over the previous record for first-half activity set in 2005.

Sales activity was particularly strong in Calgary and Edmonton, the association reported, and new records for resale housing activity in the first six months of the year were set in those cities and Regina, Saskatoon, Winnipeg, London, Sudbury, Ottawa, Montreal and Quebec City. Seasonally adjusted MLS home sales in the second quarter of 2006 numbered 84,391 units - which represents a slight decline from the record levels posted over the past year.

Actual unadjusted sales reached the second highest level on record for the second-quarter period, and were 0.5 percent below activity levels reached during second-quarter 2005. Seasonally adjusted home sales activity eased by about 1 percent from the previous month to 28,185 units in June 2006. Monthly sales activity ebbed in Toronto, Edmonton, Halifax, and a number of other markets, which more than offset monthly gains in Calgary, Ottawa, Vancouver, Winnipeg, Montreal, and London.

Actual unadjusted MLS residential new listings totaled 308,923 units in the first half of 2006 - a new record for the first six months of the year and the highest level on record for any six-month period. New listings were up by 4.6 percent from the first half of last year and were 2.3 percent higher than the previous record set in the first half of 1990, which is the only other six-month period on record in which new listings topped 300,000 units, the association reported.

"There are no signs that new listings have peaked, as seasonally adjusted quarterly and monthly new listings reached their highest levels in more than 15 years," the association also announced. Victoria and Montreal led the increases, with seasonally adjusted new listings in the second quarter reaching the highest level since fourth-quarter 1990. "A rebound in Calgary helped to push major market new listings to the highest monthly level since May 1991."

The major market MLS residential average price at mid-year was up by 11.8 percent compared to December of last year. It was also up by 12.2 percent year-over-year in the second quarter, which tied with the second quarter of 2004 for the highest year-over-year price growth of any quarter in the past 15 years. The 6.8 percent jump in price from the last quarter was also the highest quarterly increase since 1989.

Average price in the second quarter of 2006 set new quarterly records in almost every major market in Canada. The major market MLS residential average price reached $269,000 (in U.S. dollars) in June - up 11.8 percent from the same month last year.

Average price has posted double-digit year-over-year gains in every month during the first half of 2006, the association announced, and reached the highest monthly level on record in June in Calgary, Edmonton, London, Montreal and Quebec City.

The average home price fell from the record levels reached in May 2006 in a number of other markets.

CREA Chief Economist Gregory Klump said in a statement, "The housing market is tightest in Alberta, where a sizzling job market is stoking buyer demand and fueling remarkable price increases. The rise in new listings in Montreal and Toronto gives buyers in those centers a wider selection of homes to choose from, and will keep price increases in those markets below those for major markets in British Columbia and Alberta."

The association noted in the announcement that average price information can be useful in establishing trends over time, but does not indicate actual prices in centers comprised of widely divergent neighborhoods or account for price differential between geographic areas.

The Canadian Real Estate Association represents about 85,000 Realtors.