OTTAWA – January 15th, 2010 – Existing home sales activity reached the highest level ever for the month of December, according to statistics released by The Canadian Real Estate Association. Strong demand in the second half of 2009, especially in the fourth quarter, pushed annual sales above 2008 levels.
Residential sales activity via the Multiple Listing Service® (MLS®) of Canadian real estate boards numbered 27,744 units in December 2009. This stands 72 per cent above activity in December 2008, when activity dropped to the lowest level in a decade. New records for the month of December were reported in Ontario, Quebec, Saskatchewan, New Brunswick, and Newfoundland & Labrador.
Seasonally adjusted national home sales totalled 46,805 units in December, capping the strongest fourth quarter period ever. A total of 137,957 homes traded hands on a seasonally adjusted basis in the fourth quarter of 2009. This is up 2.6 per cent from the previous record set in the first quarter of 2007. New quarterly records were set in British Columbia, Ontario, and Quebec.
National sales activity began 2009 on a weak footing. Despite year-over-year increases in the second and third quarters of the year, year-to-date activity was still trailing 2008 levels at the end of September 2009. A 59 per cent year-over-year gain in the fourth quarter of 2009 pushed sales activity above annual levels for 2008.
"Sales activity in 2009 came in like a lamb and went out like a lion," said CREA President Dale Ripplinger. "The continuation of unusually low interest rates may keep national sales activity near current levels over the coming months, as will a blip in housing demand in Ontario and British Columbia from homebuyers motivated to beat the introduction of the HST."
Annual activity in 2009 was down 10.7 per cent from the peak reached in 2007. A total of 465,251 homes traded hands through the MLS® systems of real estate boards in Canada in 2009. This is up 7.7 per cent from 2008 levels, and represents the fourth highest level on record for annual activity.
The national residential average price was $337,410 in December, up 19 per cent year-over-year. On an annual basis, average price climbed five per cent to a record $320,333. Average prices set new annual records in a majority of local markets in 2009, and in every province except Alberta.
The large year-over-year increase in the national average price in December reflects the high degree to which it was skewed downward in late 2008 by unusually low activity in Canada's priciest markets. The national average price was also skewed upward by rebounding activity in the spring and summer months of 2009. The national average price rose to unprecedented heights at that time, despite records having been set in only a small number of local markets.
2009 resale housing market ends on a high note The contribution of activity by higher priced markets toward the national average price has recently returned to more typical levels. Record level average prices in most regions are now driving the national average price to new heights.
The price trend is similar but less dramatic for the national weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 3.6 per cent in 2009.
The residential average price in Canada's major markets was up 5.5 per cent year-over-year to $348,840 in 2009. As with the national counterpart, the price trend is similar but less dramatic for the major market weighted average price, which rose 2.3 per cent from 2008 levels.
Strong demand and headline average price gains are drawing more sellers to the market. New listings coming onto Boards' MLS® Systems across Canada rose to the highest level on record for the month of December, with a total of 33,090 residential properties coming on stream. This is up 4.8 per cent from December 2008, the first year-over-year gain in a year. On a seasonally adjusted basis, new listings rose by 4.7 per cent in December 2009 compared to the previous month.
The recent rising trend in new listings has not yet offset the steep decline in the number of new listings during the first half of 2009. As a result, new listings in 2009 were down 12.6 per cent from the annual peak in 2008.
Despite the recent rise in new listings, strong demand for resale housing continues to draw down inventories. There were 154,264 homes listed for sale on Boards' MLS® Systems in Canada at the end of December 2009, a decline of 22 per cent from levels reported one year ago.
Nationally, there were 4.1 months of inventory in December 2009 on a seasonally adjusted basis. This is the lowest level in more than two years.
The actual (not seasonally adjusted) number of months of inventory in December 2009 stood at 5.6 months, the lowest December figure since 2005, and well below the same month in 2008 (12.3 months). Although up slightly from November (five months), an increase is normal at this time of year since demand normally eases relative to supply over autumn and winter months. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
"CREA's latest statistics will no doubt spark further bubble talk amongst the usual suspects," said CREA Chief Economist Gregory Klump. "Cooler heads recognize that many of the recent gains reflect temporary factors that could fade by summer."
"The extraordinary decline in activity one year ago and subsequent rebound, particularly for higher-priced real estate, is stretching current year-over-year comparisons," he said. "By the second half of 2010, price gains are likely to shrink significantly, since a year will have elapsed since the decline and rebound." Klump added that, "Further expected increases in supply will also take some steam out of the market. A more balanced market will result in smaller price increases in the second half of the year, but a massive decline in demand similar to what we saw in late 2008 and early 2009 seems as unlikely as a massive spike in supply."
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.
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.
Asif Khan, Realtor
Re/Max All-Stars Realty Inc.
Follow me on Twitter www.twitter.com/remaxallstar
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GREAT NEWS for Real Estate Investors, Buyers and Sellers!!
The Bank of Canada announced today that it would keep its record low lending rate at 0.25%, and depending on the outlook for inflation will maintain that until mid 2010!
Citing that slack remains in the economy and that global recovery depends on increased government spending and low interest rates, Governor Mark Carney said that conditional on the outlook for inflation, the target overnight lending rate can be expected to remain at its current level until the end of the second quarter.
The bank also extended its schedule of term purchase and resale agreements with the longest maturities conciding with July, which is another sign that it is unlikely to tighten before then.
The Central Bank also said that the global recovery that is under way continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.
The next interest-rate decision is scheduled for March 2nd.
Asif Khan, Realtor
Re/Max All-Stars Realty Inc.
Follow me on Twitter www.twitter.com/remaxallstar
Become a Fan of "Asif Khan's RE/MAX Dream Team" on Facebook.
2009 proved to be a defining year for real estate, creating two very separate and distinct categories of Realtor.
Experienced professionals, who stayed the course, adjusting to new conditions and adhering to solid business plans, were ideally positioned for the turnaround and emerged victorious from the downturn. The fair-weather Realtors who were ill-prepared and panicked, who chose to bury their heads in the sand, were not. The media's negativity at the start of last year was met head on by RE/MAX Ontario-Atlantic and their interpretation of the Real Estate landscape was questioned. The media continued to predict what it thought would happen, then made excuses for why it didn't. RE/MAX accurately predicted what would happen, when, how and where it would happen and then watched it happen as forecasted!
On average, Canadian Re/Max Realtors averaged 18 transactions for the year. This was head and shoulders above our competition which averaged only 4 deals or the year. In total, Re/Max Realtors sold over 1/3 of ALL properties across the country in 2009, continuing to set the standard against which all other Realtors must be judged. 2010 will be an awesome year! Follow me on Twitter www.twitter.com/remaxallstar
Follow Me on TWITTER www.twitter.com/ReMaxAllStar Become A Fan Of Asif Khan's Dream Team on FaceBook
Experienced professionals, who stayed the course, adjusting to new conditions and adhering to solid business plans, were ideally positioned for the turnaround and emerged victorious from the downturn. The fair-weather Realtors who were ill-prepared and panicked, who chose to bury their heads in the sand, were not. The media's negativity at the start of last year was met head on by RE/MAX Ontario-Atlantic and their interpretation of the Real Estate landscape was questioned. The media continued to predict what it thought would happen, then made excuses for why it didn't. RE/MAX accurately predicted what would happen, when, how and where it would happen and then watched it happen as forecasted!
On average, Canadian Re/Max Realtors averaged 18 transactions for the year. This was head and shoulders above our competition which averaged only 4 deals or the year. In total, Re/Max Realtors sold over 1/3 of ALL properties across the country in 2009, continuing to set the standard against which all other Realtors must be judged. 2010 will be an awesome year! Follow me on Twitter www.twitter.com/remaxallstar
Follow Me on TWITTER www.twitter.com/ReMaxAllStar Become A Fan Of Asif Khan's Dream Team on FaceBook
Re/Max Agents average 18 deals in 2009, all other agents averaged 4! Enough Said!!