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Blog by Steve Burk

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National MLS® home sales remain strong in August

National MLS® resale housing activity remained very strong in August 2007, according to statistics released by The Canadian Real Estate Association (CREA).

Seasonally adjusted sales eased by 4.1 per cent from its highest monthly level on record in July to 43,257 units in August 2007. The monthly decline resulted largely from fewer sales in Ontario and Quebec, although activity edged lower in most provinces. It may also may mark the beginning of a return to more normal activity levels from record breaking heights in recent months.

Actual (unadjusted) sales activity in August is up 7.7 per cent compared to the same month last year. Transactions for the year-to-date in August numbered 381,753 units, up 9.4 per cent over the same period last year. The increase reflects higher sales activity in every month this year compared to last year. Year-to-date transactions continue to run ahead of year-ago levels in every province except British Columbia.

The national MLS® residential average price rose 11.2 per cent year-over-year in August to $305,823. Average price reached the highest level for the month of August in every province, and broke all previous monthly records in Saskatchewan, Prince Edward Island, and Newfoundland and Labrador.

“The statistics show that the Canadian market is based on solid fundamentals,” says CREA President Ann Bosley. “Consumer confidence remains strong and our economy continues to grow, and that is reflected in the continued sales growth.”

“We don’t see a lot of speculative buying in Canada, or property flipping. It is the publicity from the situation in the United States that may prove to be the biggest challenge,” the CREA President adds.

Seasonally adjusted new MLS® listings eased by three tenths of one per cent month-over-month to 71,010 units in August – the fourth highest level on record. A monthly decline in new listings in Ontario, Quebec and British Columbia was offset by additional new listings in all prairie provinces. Seasonally adjusted new listings reached the second highest monthly level on record in Alberta.

Easing sales activity left the resale housing market more balanced in August than it was in July. The market was more balanced in every province except Prince Edward Island, and this trend was most pronounced in Saskatchewan and Manitoba.

“Resale housing price increases continue to outstrip consumer price inflation because the homebuyer demand is still outstripping supply,” said CREA Chief Economist Gregory Klump. “Despite the rapid increase in home prices, affordability has stayed within reach for many homebuyers who finance their purchase with a longer term mortgage. With the Bank of Canada expected to hold off raising interest rates until the dust from the US sub-prime mortgage meltdown settles, homebuyer demand and price increases are expected to stay high.” (CREA 28/09/07)