Home sales activity up for 2nd straight month in Canada

By Mario Toneguzzi, Calgary Herald

CALGARY - The residential resale market showed signs of life again in March both nationally and at a local level. Data released Wednesday by the Canadian Real Estate Association (CREA) indicated existing MLS home sales activity increased for the second month in a row in March across the country.

The association also said the number of new listings continued trending lower in March, which firmed up the balance of supply to demand.

In Canada, a seasonally-adjusted total of 31,135 homes traded hands nationally in March, an increase of seven per cent from the previous month. The number of transactions in March is 18 per cent higher than levels reported in January when activity sank to the lowest level in a decade.

The national average price for home sales remains below levels reached one year earlier, but year-over-year declines are shrinking, said CREA. The average residential price in March was $288,641, down 7.7 per cent from March 2008. This is the smallest year-over-year decline in six months.

In Calgary, the average residential MLS price (including all property types) was $372,114 in March, down 11.3 per cent from a year ago. Sales were down by 24.3 per cent to 1,797 units, new listings were down by 38.7 per cent to 3,792 units and total dollar volume for all transactions was off by 32.8 per cent compared with a year ago to $668.7 million.

In Alberta in March, the average price fell by 10.4 per cent from a year ago to $327,919, sales dropped by 23.2 per cent to 4,115 units, new listings declined by 30.3 per cent to 9,528 units, and total dollar volume for all transactions was off by 31.2 per cent to $1.3 billion.

“Housing markets are starting to show signs of buyer interest because of lower prices and interest rates,” said Dale Ripplinger, CREA’s president, in a news release. “We expect April sales activity will feel some effects from the federal government incentives announced in the last budget, including the increase in the maximum withdrawal allowed under the Home Buyers’ Plan, and the First Time Buyer Tax Credit.”

A number of major housing markets are stabilizing, as buyers respond to improving affordability,” said CREA chief economist Gregory Klump. “Looking back to economic recessions in the early 1980s and 1990s, national resale housing activity bottomed out before the job market or economy did,” he said. “It will take time for ample supplies of new and existing homes to be drawn down, but demand appears to be stabilizing.”

The CREA report does provide some evidence that Canadian housing market activity may have improved modestly in recent months as homebuyers take advantage of the improved buying conditions – namely, low mortgage rates and more affordable prices, said Millan Mulraine, economics strategist with TD Securities. “This is certainly encouraging. Nevertheless, with the Canadian economy continuing to be in a very intense recession and labour market conditions continuing to worsen at an alarming pace, we expect overall housing market activity to remain soft in the coming months.”

mtoneguzzi@theherald.canwest.com © Copyright (c) The Calgary Herald