National housing market cools in first half of 2008
For the fifth year in a row, more than a quarter of a million units were sold in Canada through the Multiple Listings Service® during the first six months of the year. The report from The Canadian Real Estate Association (CREA) also shows that seasonally adjusted national activity in 2008 has held steady since posting a 6.0 per cent month-over-month decline in February.
However, national MLS® sales activity in the first half of 2008 was down 13.1 per cent compared to record levels for the same period last year.
On a seasonally adjusted basis, dollar volume was valued at $36.0 billion in the second quarter, down 3.1 per cent quarter-over-quarter. This is the fourth quarterly decline since dollar volume peaked one year ago. In June, the seasonally adjusted dollar value of MLS® sales edged 0.2 per cent higher on a month-over-month basis to $12.0 billion. Dollar volume remained strongest in Quebec and New Brunswick, setting new records in June.
Sales activity for the first half of this year did set a new record in Newfoundland and Labrador. In the second quarter, seasonally adjusted activity reached the second highest level on record in Manitoba and Quebec. Second quarter activity also posted the third highest level in Newfoundland and Labrador, and reached the fourth highest level ever in New Brunswick.
MLS® residential dollar volume totaled $78.9 billion in the first half of 2008. This is the second highest level on record for the first six months of the year, down 10.0 per cent from the peak reached last year.
“In essence, Canada’s housing market has pulled back from the record-setting pace set in 2007, but in most provinces it continues at or near sales levels set in the years before that,” says the President of The Canadian Real Estate Association, Calvin Lindberg. “The increase in housing prices is also pulling back from the record-setting pace of last year, but we have yet to see any of the price contractions that have impacted the housing market in the United States.”
The national MLS® residential average price set new records for the first half of 2008, as well as for the second quarter period. In the first half of 2008, the MLS® residential average price rose 3.6 per cent year-over-year to $313,610. On a quarterly basis, the average price was $315,760 in the second quarter, up 1.8 per cent from the second quarter of 2007. In June the national average price held steady on a year-over-year basis at $314,028.
Average price was unchanged in Alberta, but rose on a year-over-year basis in all other provinces in June. MLS® residential average price scaled new heights in Quebec, New Brunswick, Prince Edward Island, and Newfoundland & Labrador.
As CREA reported earlier in the Major Market MLS® Report, over the past six months a surge in new listings and easing sales activity has caused the national resale housing market to become considerably more balanced. This trend was notable in British Columbia and Saskatchewan, which were the most balanced provincial markets in June.
The number of new listings of homes for sale on the Multiple Listing Service® (MLS®) of all real estate boards in Canada reached record levels in the first half of 2008 as sales activity retreated from last year’s record levels.
New MLS® residential listings numbered 518,270 units in the first six months of 2008, up 9.6 per cent from the previous record set in the same period last year. This is the first time in any six-month period that new MLS® listings surpassed half a million units. For the fourth time in as many months, seasonally adjusted new MLS® residential listings topped 75,000 units in June 2008.
Fuelled by the highest monthly levels on record in April, May, and June, seasonally adjusted new listings climbed 5.1 per cent quarter-over-quarter to a new record level in the second quarter of 2008. The number of new listings set records in British Columbia, Saskatchewan, Ontario, Quebec, and New Brunswick. This more than offset a quarterly decline in the number of new listings in Alberta, where levels continue retreating from the peak reached in March.
“Resale housing activity is cooling evenly in rural, suburban, and urban markets,” said CREA Chief Economist Gregory Klump. “There is no statistical evidence to date that shows increases in energy prices are prompting Canadians to re-locate. Lifestyle factors remain the prevalent influence on homebuyer preferences,” he said. (CREA 28/07/08)