December MLS® sales figures show that the glory days of the real estate market are not coming to an end any time soon.
Many markets, including Winnipeg, experienced record MLS® sales and dollar volume activity. If not for a few markets, such as Vancouver, where prices have become so unaffordable that sales were down in 2006, the Canadian Real Estate Association would have set another annual existing home sale record. Still, CREA’s residential average price continues its upward climb to close in on $300,000. In comparison, Winnipeg’s average price for 2006 was nearly half of the national average at just over $153,000.
Annual MLS® home sales in 2006
Sales of existing homes in Canada’s major markets reached the second highest annual level on record in 2006, according to statistics released by the Canadian Real Estate Association. The number of units sold in 2006 was just 242 units shy of the record set in 2005.
Annual sales via MLS® in Canada’s major markets totaled 336,271 units in 2006. This represents a decline of just 0.07 per cent from levels recorded one year earlier. 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 per cent to 84,183 units. The quarterly increase resulted largely from 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. The monthly increase was fueled by strong gains in Calgary, Toronto and Montreal. This pushed overall resale activity to the highest seasonally-adjusted monthly level for any month in 2006.
In Calgary, seasonally-adjusted transactions jumped by 18 per cent compared to November, 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 per cent. 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 Canada.
The major market MLS® residential average price rose by 10.6 per cent to $294,270 in 2006 to set a new annual record. The annual increase was the strongest since 1989, and was fuelled by increases in Vancouver, Victoria, Calgary, Edmonton and Winnipeg.
Price increases began to show signs of easing in the fourth quarter of 2006. The major market MLS® residential average price rose by 9.2 per cent over the same quarter in 2005, the first year-over-year increase of less than 10 per cent since the fourth quarter of 2005.
Year-over-year monthly increases in price have also been lessening. The major market MLS® residential average price rose by 8.1 per cent year-over-year in December 2006, the smallest increase of the year.
“MLS® home sales activity across Canada’s major markets in 2006 came in just short of the record set in 2005,” said Alan Tennant, president of the Canadian Real Estate Association. “Consumers continue to view housing as a solid investment, and the market remains on firm ground as we start the New Year.”
“Price increases have been lessening 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 2007 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,” added Klump. “If sales activity in Calgary gains further momentum, price increases there may again heat up unless new listings pick up additional steam.”
“Conditions are not uniform and vary from market to market,” said Tennant. “To gain a full understanding of what’s happening in your local real estate market, contact your REALTOR®.”