Sales of existing homes in Canada’s major markets reached the second-highest annual level on record in 2006, falling just 242 units shy of the record set in 2005, according to statistics released by The Canadian Real Estate Association.
Annual sales via the Multiple Listing Service in Canada’s major markets totaled 336,271 units in 2006, which is off just 0.07 percent from levels recorded in 2005. Strong gains in activity in Calgary and Edmonton — and to a lesser extent in Ottawa and Montreal — helped to offset fewer transactions in Vancouver. A number of major markets set new annual sales records in 2006, including Calgary, Edmonton, Saskatoon, Winnipeg, Sudbury, Ottawa, Montreal and Quebec City.
Seasonally adjusted sales activity in the fourth quarter of 2006 rose by 2.4 percent to 84,183 units, largely a result of a surge in activity in Calgary and Toronto. New quarterly records for sales activity were set in Edmonton, Saskatoon, Sudbury and London.
In the month of December, major-market sales activity reached the fourth-highest monthly level on record, fueled by strong gains in Calgary, Toronto and Montreal, and pushed overall resale activity to the highest seasonally adjusted monthly level for any month in 2006. In Calgary, seasonally adjusted transactions jumped by 18 percent from November’s level, and surpassed all previous monthly records.
MLS residential new listings in major markets broke all previous annual records, posting an annual increase of 5.2 percent. New listings broke all previous annual records in a number of major markets, including Victoria, Calgary, Toronto and Montreal. New residential listings in Montreal also reached the highest quarterly level ever in the fourth quarter, and the highest monthly level on record in December.
Although new listings caused the resale housing market to become more balanced, it remains a seller’s market — especially in western markets. In keeping with this trend, prices rose fastest in western markets. The major-market MLS residential average price rose by 10.6 percent to $294,270 ($250,666 in U.S. dollars) in 2006 to set a new annual record. The annual increase was the strongest since 1989, and was fueled by increases in Vancouver, Victoria, Calgary, Edmonton and Winnipeg.
Price increases began to show signs of easing in the fourth quarter, as the major-market MLS residential average price rose by just 9.2 percent over the same quarter in 2005 — the first year-over-year increase of less than 10 percent since the fourth quarter of 2005. Year-over-year monthly increases in price have also been getting smaller. The major market MLS residential average price rose by 8.1 percent year-over-year in December 2006 — the smallest increase of the year.
“Price increases have been getting smaller as new listings increased in many markets, including western Canada,” said CREA’s Chief Economist Gregory Klump. “CREA forecasts that price increases will be smaller in 2006 on a national basis, but will remain biggest in western markets.”
“One market that stands out is Calgary, where a spike in sales activity late in the year caused the resale housing market to tighten dramatically.” said Klump. “If sales activity in Calgary gains further momentum, price increases there may again heat up unless new listings pick up additional steam.”