MLS® home sales set record for first half of 2006
Ottawa – July 17, 2006 — Resale housing activity in Canada’s major markets in the first six months of 2006 surpassed all previous records for the first half of any year, according to statistics released by The Canadian Real Estate Association. Sales activity remains on track to set a new annual record in 2006 even though further expected price increases and recent mortgage rate hikes will cause transactions to soften marginally in the second half of the year.
Actual (unadjusted) home sales via the Multiple Listing Service® (MLS®) in Canada’s major markets numbered 186,177 units in the first half of 2006 – up 3.6 per cent from the previous record for first-half activity set in 2005.
Surging activity in Calgary and Edmonton remains the driving force behind the continuing strength of national residential sales activity. New records for resale housing activity for the first half of the year were set in a number of major markets including Calgary, Edmonton, 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 – down just slightly 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 less than 0.5 per cent below activity levels reached during the second quarter of last year.
Seasonally adjusted home sales activity eased by less than one per cent 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 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 per cent from the first half of last year. They were 2.3 per cent 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.
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. Driven by increases in Victoria and Montreal, seasonally adjusted new listings in the second quarter reached the highest level since the fourth quarter of 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 per cent compared to December of last year. It was also up by 12.2 per cent 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 per cent 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 $304,328 in June – up 11.8 per cent 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, and reached the highest monthly level on record in June in Calgary, Edmonton, London, Montreal and Quebec City. Average price edged down slightly from the record levels reached in May 2006 in a number of other markets.
"With interest rates having peaked, strong employment and rising after-tax incomes will no doubt keep resale housing activity strong over the second half of the year," said CREA Chief Economist Gregory Klump. "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 centres 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," Klump noted.
"As the market becomes more balanced in many urban centres, average price growth will continue to be skewed higher by a surge in demand for luxury homes," said Alan Tennant, FRI, President of The Canadian Real Estate Association. "Market trends differ between cities, and among areas and housing types within a city. For local market expertise and information, buyers and sellers should use the professional services provided by a REALTOR®."