It was interesting to attend the early April provincial budget lock-up session to pour through all of the documents prior to their official release by Finance Minister Greg Selinger during his budget address. Within the documents there were a few references to WinnipegREALTORS® and its impressive MLS® sales activity as well as the double-digit growth in sales value over the last five and six years. Moreover, the real estate boom, as it was referred to, also contributed to the boost in retail sales.
At the WinnipegREALTOR®/Manitoba Real Estate Association Provincial Leaders Forum delivered live to Manitoba living rooms throughout the province by Shaw TV on May 14, Premier Gary Doer acknowledged house prices have been moving up. He also said positive developments such as projects like the MTS Centre and Manitoba Hydro’s downtown high-rise have added to consumer confidence.
There clearly is greater recognition in Manitoba and across the country about how important the real estate industry has become as an economic engine for the Canadian economy. A March 2007 study prepared by Altus Clayton for the Canadian Real Estate Association (CREA) estimates that a total of $32,200 in ancillary spending was generated by the average housing transaction in Canada between 2003 and 2005. Considering an average of 459,900 home sales processed through MLS® during that period, this equates
to more than $14.8 billion in spending
per year across Canada. Likewise, some 153,400 jobs are estimated to have been generated from this MLS® resale activity.
Based on the over 12,300 MLS® sales in Winnipeg last year, there was close to $400 million in economic activity locally generated. While modest in order of magnitude to the national figure, it is still sizable and significant to the local economy.
So, where are we in 2007? Further ahead than 2006 as shown by the following CREA April market release.
MLS® home sales soar in April
April was a record-setting month for Canada’s resale housing market. The number of units sold, average prices and dollar volume all reached never-before-seen levels for any month, according to statistics released by the Canadian Real Estate Association.
Seasonally-adjusted MLS® home sales in Canada’s major markets totaled 30,615 units in April 2007.
Led by gains in Toronto and Montreal, seasonally-adjusted activity rose 1.9 per cent over levels recorded the previous month, and 1.1 per cent above the previous monthly record set this January. Seasonally-adjusted activity set new monthly records in Saskatoon, Toronto and Kitchener, while in Montreal it reached its second highest monthly level on record.
Year-to-date transactions also set a new record in April. Some 123,761 homes traded hands via MLS® in the first four months of the year, 7.4 per cent more than during the same period last year.
New year-to-date records were set in a number of major markets, including Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Kitchener-Waterloo, Sudbury, Ottawa, Montreal, Saint John, Halifax-Dartmouth and St. John’s.
The major market MLS® residential average price rose 9.5 per cent year-over-year to $323,936 in April which is a new record. Average prices reached their highest monthly levels on record in Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, London & St. Thomas, Ottawa, Montreal and Halifax-Dartmouth.
Seasonally-adjusted MLS® residential new listings rose 3.1 per cent month-over-month to 49,127 units in April, reaching their second-highest level on record. The monthly increase was fueled by a slew of new listings in Vancouver, Victoria, Calgary, Toronto and Montreal. New listings also reached unprecedented numbers in Calgary and Edmonton this April.
The last time so many new listings came on the Canadian market in any one month was in October 1990.
“Overall, the increase in sales in April was slightly less than the increase in new listings,” said CREA president Ann Bosley. “This meant that despite the sales records, the resale housing market became more balanced in April compared to the previous month. Conditions remain tightest in Western markets, but most markets are moving into a more balanced position.”
“The strong momentum for resale housing market activity this spring builds on its record breaking performance in the first quarter,” said CREA chief economist Gregory Klump. “There has been anecdotal evidence that resale activity in some Western markets is getting a boost from a shortage of lots and from buyers who don’t want to wait for their new home to be built.”
The Canadian Real Estate Association forecast for resale housing said MLS® sales are heading for another record year in 2007. The association expects national home sales will increase by 3.6 per cent to 500,995 units in 2007, and will set new records in most provinces.
Activity is forecast to edge slightly lower in 2008, but will remain high in all provinces.
“Resale housing activity in the first quarter was far stronger than anybody had anticipated,” said CREA Chief Economist Gregory Klump. “Home buying sentiment remains strong in all regions, and new listings have been unable to keep pace with sales activity.”
“The resale housing market will become more balanced as rising prices erode affordability and cause a gradual retreat in sales activity,” added Klump. “A strong job market and the continuation of low interest rates will keep sales activity strong even as prices continue to rise.”
The housing market in Canada has not mirrored the market in the United States, noted Bosley. “Residential real estate markets across Canada remain healthy and active, and it is important to note that the negative factors weighing on U.S. home sales are largely absent in Canada.
“For local market expertise and sound advice, consumers should consult their REALTOR®,” she added.
The CREA forecast is posted on the association’s website at www.crea.ca