CREA News

OTTAWA – November 15, 2011 – The Canadian Real Estate Association (CREA) has made a small revision to its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2011 and 2012.

Activity came in broadly in line with expectations across much of the country in the third quarter of 2011 with the exception of Ontario. Sales there came in stronger than anticipated in a number of regions over the summer, but were held aloft mostly by Toronto activity as the third quarter ended.

Stronger than anticipated sales in Ontario pushed up national activity in the third quarter, and prompted CREA to raise its annual sales forecast for 2011 from 0.9 per cent to a revised 1.4 per cent.

“The continuing strength of home sales activity in the face of ongoing financial market volatility speaks volumes about the confidence of Canadians in our housing market, said Gary Morse, CREA’s President. “Interest rates look like they’ll remain low at levels that are friendly to the housing market for some time to come, and that’s good news for Canadian home sales activity and the overall economy.”

CREA forecasts that national sales activity in 2012 will ease by 0.5 per cent to 451,200 units. This represents a small upward revision CREA’s previous 2012 sales forecast, and reflects expectations that Canadian interest rates will remain low until well into next year. Forecast sales for 2011 and 2012 remain roughly on par with the annual average for activity over the past ten years.

The national average price has evolved as CREA expected, with average home prices in Vancouver moderating compared to levels in the first half of the year. Vancouver sales of multi-million dollar properties have returned to more normal levels after having shattered a number of monthly records this spring.

CREA’s national average home price forecast for 2011 is little changed at $362,700, representing an annual increase of 7.0 per cent. In 2012, the national average price is forecast to hold even with the 2011.

“A number of factors will keep Canada’s housing market in check as interest rates remain low,” said Gregory Klump, CREA’s Chief Economist. “These include tightened mortgage regulations, high household debt levels, together with slower economic and job growth. That said, with global economic growth expected to remain fragile but positive, employment levels and income growth in Canada should remain supportive for the housing market.”

“Headline news about economic uncertainty has put only minor dents in consumer confidence. How confidence evolves depends on how global turmoil plays out over the coming months. Should global economic headwinds weigh more heavily than expected on Canadian economic prospects, the federal government and the Bank of Canada have made it clear they stand ready to take flexible and measured responses as appropriate. That’s encouraging from the standpoint of the Canadian economic and housing market prospects.” 

Ottawa, ON, November 3, 2011 – The President of the Canadian Real Estate Association (CREA), Gary Morse, today welcomed the decision of the Competition Tribunal to grant CREA leave to intervene in the proceedings the Commissioner of Competition has brought against the Toronto Real Estate Board (TREB).

“We are pleased that the Tribunal is willing to hear our position in this matter and look forward to contributing to the Tribunal on important issues that will affect not only TREB and its members, but will also have broader implications for other Boards and Associations,” said Morse.

CREA had applied for leave to intervene August 31, 2011, and the Tribunal heard arguments on the application on October 18, 2011.  The Commissioner of Competition had opposed CREA’s application. All documents related to the case can be found on the Tribunal’s website at www.ct-tc.gc.ca.

“The important issues under discussion may lead to a Tribunal Order affecting data sharing over the Internet which directly affects the interests of all CREA members,” continued Morse. “It is important for us, and our members, to be at the table and part of this discussion.”

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations, representing more than 100,000 REALTORS^® working through more than 100 real estate Boards and Associations.

The Bank of Canada kept its trend-setting Bank Rate at 1.25 per cent on October 25, 2011. This marks the ninth consecutive announcement in which interest rates have been held steady.

The tone of the accompanying statement was very dovish, with the Bank noting that “the global economy has slowed markedly as several downside risks to the projection outlined in the Bank’s July Monetary Policy Report (MPR) have been realized.”

Of particular note, the Bank said it now expects a “brief recession” in the Eurozone. The Bank remains of the opinion that the euro-area crisis will be contained, but flagged obvious downside risks to that assumption.

As a result of this and other factors, the Bank has downgraded its forecast Canadian economic growth this year (2.1% compared to 2.8% in the July MPR) and for 2012 (1.9% compared to 2.6% in the July MPR).

That said, the outlook for growth in 2013 was upgraded to 2.9% from 2.1%, indicating the Bank believes that anticipated stronger growth will eventually be achieved. Along with the return of more robust economic activity being pushed further out into the future, core inflation is now expected to remain below the Bank’s 2% target until the end of 2013.

What it all means is that interest rates will likely be on hold even longer. Expectations as to how long it would be before the Bank hikes rates had previously centered around the fall  of 2012, although it will now more likely be into 2013 before the Bank begins to tighten monetary policy from current levels.

As of October 25, 2011, the advertised five-year lending rate stood at 5.29 per cent. This is down 0.1 percentage points from 5.39 per cent on September 7, when the Bank made its last policy interest rate announcement.

The Bank will make its next scheduled rate announcement on December 6^th, 2011.

http://creastats.crea.ca/natl/interest_rate_trends.htm

(CREA 10/25/2011)

OTTAWA – October 17, 2011 – According to statistics[1] released today by The Canadian Real Estate Association (CREA), national resale housing activity picked up in September 2011.

Highlights:

• Sales activity rose 2.7 per cent in September from the previous month.
• Holding in line with the ten-year average, activity during the first nine months of this year pulled ahead of sales over the same period last year.
• The number of newly listed homes held steady when compared to the previous month.
• The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory.
• The national average price posted the smallest year-over-year increase since January.

National sales activity rose 2.7 per cent in September when compared to August, and follows three months of stable activity. September’s increase reflects strengthened activity in a number of major markets, led by Toronto. The monthly increase pushed national sales to its highest level since recently tightened mortgage regulations dampened sales earlier this year.

Actual (not seasonally adjusted) national sales activity came in 11 per cent above levels in September 2010. As was the case over the summer, the year-over-year increase reflects weakened activity one year ago.

A total of 361,749 homes have traded hands via Canadian MLS® Systems to date this year. This is 1.2 per cent above levels for the same period in 2010, and in line with the ten-year average.

“The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy,” said Gary Morse, CREA President. “Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended. That said, housing market trends often diverge from national trends due to local factors, so buyers and sellers should talk to a local REALTOR® to understand housing market trends at play where they live.”

The number of newly listed homes nationally was little changed from each of the previous two months. New listings were up from the previous month in a number of major markets including Toronto, Montreal, Ottawa, Oakville and Vancouver, offset by fewer new listings in other markets including Edmonton and the Fraser Valley.

The monthly rise in sales resulted in a tighter national housing market that remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 52.8 per cent in September, up from 51.6 per cent in August.

Based on a sales-to-new listings ratio of between 40 to 60 percent, nearly two-thirds of all local markets in Canada were in balanced market territory in September, with an even split of buyer’s and seller’s markets among the remainder.

The number of months of inventory stood at 6.1 months at the end of September on a national basis, little changed from the end of August (6.2 months). It represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of balance between housing supply and demand. Months of inventory have held steady at about six months since April.

The actual (not seasonally adjusted) national average price for homes sold in September 2011 stood at just under $352,600, remaining below record level heights reached earlier this year. While up 6.5 per cent from September 2010, the year-over-year increase is the smallest since January.

“Canada’s housing market remains stable amid continuing financial market volatility, contributing to Canadians’ confidence in the economy and providing support for Canadian economic growth,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert. Both of these developments are good news for the housing market.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 99,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at http://www.crea.ca/public/news_stats/media.htm

For more information, please contact:
Pierre Leduc, Media relations
The Canadian Real Estate Association
P: 613-237-7111 or 613-447-4532
E: pleduc@crea.ca

OTTAWA – September 15, 2011 – According to statistics1 released today by The Canadian Real Estate Association (CREA), national resale housing activity in August 2011 remained stable for the second consecutive month.

Highlights:
• Sales activity was stable from July to August, but posted another big year-over-year gain reflecting weakened demand last summer.
• Year-to-date sales pulled ahead of 2010 levels for the first time this year, and remain in line with the ten-year average.
• The number of newly listed homes was also little changed from July to August.
• The national housing market stayed firmly entrenched in balanced territory.
• There were more balanced local markets in August than at any other time on record.
• The national average price posted another year-over-year gain in August, but has moderated from elevated levels earlier this year.
• Upward skewing of the national average price is diminishing due to fewer expensive sales and a declining share of national activity in Vancouver and Toronto.

For a second consecutive month, national home sales activity held steady in August 2011 when compared to the previous month.

Among major urban centres, Toronto and Ottawa posted a monthly increase in activity while Calgary, Montreal and Vancouver saw activity decline slightly.

“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, CREA President. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”

Actual (not seasonally adjusted) sales activity came in 15.8 per cent above national levels reported one year earlier. This was the largest year-over-year increase since last April, but largely reflects weakened activity one year ago.

A total of 324,030 homes have traded hands via Canadian MLS® Systems so far this year. While this stands only marginally above levels in the first eight months of last year, it nevertheless marks the first time this year that year-to-date activity has pulled ahead of 2010 levels.

As has been the case for much of this year, the year-to-date sales figure continues to run in line with the ten-year average.

The number of newly listed homes nationally was also little changed from July to August. This kept the national housing market firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 51.6 per cent in August, unchanged compared to July.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, 70 per cent of all local markets in Canada were in balanced market territory in August – a greater percentage than at any other time on record. There were just 12 buyers’ markets in August, which was the lowest figure so far this year.

The number of months of inventory stood at 6.2 months at the end of August on a national basis, which is little changed from the end of July (6.1 months). The national months of inventory figure has been stable at about six months since April. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in August 2011 stood at $349,916. This is 7.7 per cent above its year-ago level, which marked the low point for 2010.

The national average price has moderated compared to earlier this year, with sales activity in Vancouver, and more recently in Toronto, exerting less of an effect on the national average. Their share of provincial and national sales activity reached unusually elevated levels earlier this year, but has since receded in line with normal seasonal variations.

“Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said Gregory Klump, CREA’s Chief Economist. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas.

Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.

1 All figures in this release, unless otherwise noted, are seasonally adjusted to remove normal seasonal variation. Removing regular seasonal variations enables analysis of monthly changes and fundamental trends in the data.