CREA News

OTTAWA – September 30th, 2008 – The number of properties listed via the MLS® systems of real estate boards in Canada retreated in August 2008 from record levels in the previous four months, according to statistics released today by The Canadian Real Estate Association (CREA). With new listings down from the recent peak, the resale housing market is stabilizing in most provinces.

“These days, REALTORS® in Canada face a lot of questions about the real estate market, real estate price bubbles, and the value of a home. That’s because we are at the end of an unusually active period in Canadian real estate – 2007 was a record year for many of the things we use to monitor the real estate market, including the average MLS® residential price,” said the President of The Canadian Real Estate Association, Calvin Lindberg.

“We must remember that all markets go through cycles, and remember that the national housing market is actually made up of different communities. Real estate markets are local, and every community, and every area, is different in terms of trends and pricing,” the CREA President added.

“Slower activity in some of Canada’s pricier housing markets compared to year-ago levels will continue weighing on the national average price,” explains CREA Chief Economist Gregory Klump.

“As our analysis shows, the Canadian housing market is stable and home sellers are not under pressure to sell. This is in stark contrast to the U.S. housing market, where there are a large number of distress sales. In Canada, with price gains diminishing and homebuyers taking more time to shop, the number of active MLS® listings may continue to ease so the Canadian housing market would stabilize further.”

OTTAWA – September 15, 2008 – MLS® new residential listings in Canada’s major markets retreated in August 2008 from record levels in the previous four months, according to statistics released by The Canadian Real Estate Association (CREA). With new listings down from the peak, the resale housing market is stabilizing.

After four consecutive months in which new MLS® residential listings topped 50,000 units, some 47,657 homes were listed via MLS® on a seasonally adjusted basis in August 2008. This is a decline of 5.3 per cent compared to the previous month. New listings having eased in many major centres, and now stand at their lowest level this year.

This trend has been most evident in Calgary and Edmonton, where fewer new listings and rising sales activity have stabilized the resale housing market. New listings remain most elevated relative to sales activity in Saskatoon and Vancouver, making them the most balanced major markets in the country.

Seasonally adjusted MLS® sales activity in Canada’s major markets edged down by 3.4 per cent on a month-over-month basis to 24,887 units in August 2008. The number of transactions was down in every market except Calgary, Edmonton and Regina, with Vancouver posting the largest decline in sales activity.

Sales activity in August was down from year-ago levels in the five most expensive major markets in Canada – Vancouver, Victoria, Calgary, Toronto and Edmonton. As a result, the overall major market MLS® residential average price posted another year-over-year decline in August, despite the fact that average prices recorded year-over-year gains in 20 of 25 major markets.

“When comparing statistics, remember 2007 was a record year for real estate sales in Canada,” says CREA President Calvin Lindberg. “In light of that fact, our current market can certainly be characterized as stable.”

“The Canadian market fundamentals are still solid, and mortgage rates are still at near record low levels,” the CREA President adds. “The challenge is for sellers to price their home to meet the local market realities, and for buyers to realize there is no real estate bubble that will burst and send prices to new lows.”

The average sale price of residential properties sold via MLS® was $316,052 in August. This is 5.1 per cent below where it stood in August last year. Five major markets saw year-over-year declines in average price in August: Vancouver, Victoria, Calgary, Edmonton, and Windsor.

“Price declines in the pricier major markets are pulling down the overall average price,” said CREA Chief Economist Gregory Klump. “Significantly lower sales activity in Greater Vancouver compared to a year ago means that the most expensive market in Canada now has less weight in the overall average price calculation,” he explained.

Sales activity is down in a number of resale housing markets in Western Canada that earlier posted hefty price increases. Prices continue rising in other markets where price gains have been more modest,” said Klump.

REALTORS® welcome Conservative Party’s first-time homebuyers tax credit

OTTAWA – September 16th, 2008 – REALTORS® welcomed today’s announcement by the Conservative Party of a proposed tax credit for first-time homebuyers for intended application against closing costs of the purchase of a home.

“The issue of affordability is one that REALTORS® constantly monitor, and we welcome this initiative,” says the President of the Canadian Real Estate Association, Calvin Lindberg.

However, REALTORS® believe that the changes to the existing, well-known Home Buyers Plan that CREA has been advocating for several years will also be an effective way to address the issue of affordability for first-time buyers. CREA proposes that the federal government raise the maximum withdrawal limit in the Home Buyer’s Plan from $20,000 to $25,000. The HBP is a unique program that encourages savings, maximizes down payments and helps first-time homebuyers minimize debt over time.

The current withdrawal limit has not been changed since the program was introduced in 1992. In 2007, using the HBP, nearly 105,000 Canadians borrowed more than $1.2 billion from their personal RRSPs to use as a down payment in the purchase of their first home.

“Research has shown that, despite their enthusiasm for home ownership, first-time buyers, especially younger Canadians, find it a real challenge to finance their first home,” says Mr. Lindberg. ”We welcome any initiative that helps these buyers.”