Activity came in broadly in line with expectations across much of the country in the third quarter of 2011 with the exception of Ontario. Sales there came in stronger than anticipated in a number of regions over the summer, but were held aloft mostly by Toronto activity as the third quarter ended.

Stronger than anticipated sales in Ontario pushed up national activity in the third quarter, and prompted CREA to raise its annual sales forecast for 2011 from 0.9 per cent to a revised 1.4 per cent.

“The continuing strength of home sales activity in the face of ongoing financial market volatility speaks volumes about the confidence of Canadians in our housing market, said Gary Morse, CREA’s President. “Interest rates look like they’ll remain low at levels that are friendly to the housing market for some time to come, and that’s good news for Canadian home sales activity and the overall economy.”

CREA forecasts that national sales activity in 2012 will ease by 0.5 per cent to 451,200 units. This represents a small upward revision CREA’s previous 2012 sales forecast, and reflects expectations that Canadian interest rates will remain low until well into next year. Forecast sales for 2011 and 2012 remain roughly on par with the annual average for activity over the past ten years.
The national average price has evolved as CREA expected, with average home prices in Vancouver moderating compared to levels in the first half of the year. Vancouver sales of multi-million dollar properties have returned to more normal levels after having shattered a number of monthly records this spring.

CREA’s national average home price forecast for 2011 is little changed at $362,700, representing an annual increase of 7.0 per cent. In 2012, the national average price is forecast to hold even with the 2011.

“A number of factors will keep Canada’s housing market in check as interest rates remain low,” said Gregory Klump, CREA’s Chief Economist. “These include tightened mortgage regulations, high household debt levels, together with slower economic and job growth. That said, with global economic growth expected to remain fragile but positive, employment levels and income growth in Canada should remain supportive for the housing market.”

“Headline news about economic uncertainty has put only minor dents in consumer confidence. How confidence evolves depends on how global turmoil plays out over the coming months. Should global economic headwinds weigh more heavily than expected on Canadian economic prospects, the federal government and the Bank of Canada have made it clear they stand ready to take flexible and measured responses as appropriate. That’s encouraging from the standpoint of the Canadian economic and housing market prospects.”

Highlights:

•Sales activity rose in October, marking the highest level since January.
•Actual (not seasonally adjusted) national sales activity in October stayed in line with the 10-year average for the month, as it has most months this year.
•Year-to-date sales are also even with the 10-year average.
•The number of newly listed homes remained little changed from levels in the previous three months.
•While the combination of stronger sales and stable new listings resulted in a slightly tighter balance of supply and demand, the national housing market remains firmly rooted in balanced territory.
•The national average price posted a 5.5 per cent year-over-year gain in October, the smallest increase since January.
Homes sold through MLS® Systems of real estate Boards and Associations in Canada rose 1.2 per cent in October 2011 from the previous month. While national sales activity levels are still best described as average, the monthly rise in October sales built on the 2.5 per cent gain in September, and lifted activity to the highest level since January.

Just over half of all local markets posted monthly sales increases, led by gains in Montreal, Toronto, and Vancouver.

“There was no shortage of headline news in October about global financial market volatility and economic uncertainty, but it doesn’t appear to have dampened homebuyers’ spirits,” said Gary Morse, CREA’s President. “Interest rates are at low levels and are likely to stay that way for some time to come. Homebuyers clearly see the opportunities that the current interest rate environment presents. That said, all real estate is local, so buyers and sellers should consult their local REALTOR® for an understanding of opportunities in their housing market.”

As has been the case in most months this year, actual (not seasonally adjusted) national home sales in October stayed in line with the 10-year average for the month. Although up 8.5 per cent from levels one year ago, the gain in large part reflects last year’s nascent pick-up in activity following a mid-year lull.

A total of 397,561 homes have traded hands via Canadian MLS® Systems so far this year. This represents an increase of 1.8 per cent from levels in the first 10 months of 2010, but is directly in line with the 10-year average for the year-to-date figure.
The number of newly listed homes remained little changed in October compared with levels recorded in each of the previous three months.

“The prevailing economic outlook for Canada is one of slower but still positive economic growth, with heightened caution about investment and hiring decisions,” said Gregory Klump, CREA’s Chief Economist. “Consumer confidence and the housing sector are being supported by low interest rates and high employment levels, but their prospects depend on how Canada’s economic outlook evolves in response to global economic risks and outcomes in the months ahead.

Home sales activity over the past couple of months suggests buyers are confident that the Canadian economy will remain relatively unscathed by global economic risks, since every home purchase is a homebuyer’s vote of confidence in the future. That confidence is no doubt rooted in the success of coordinated fiscal and monetary policy responses that helped quickly pull Canada out of the last recession, and a stated willingness and ability to carry out further policy actions if need be.”

While the combination of stable new listings and stronger sales made for a slightly tighter balance between supply and demand in October, the national housing market remains firmly rooted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 53.4 per cent in October, up from 52.8 per cent in September.

Based on a sales-to-new listings ratio from 40 to 60 percent, about 60 per cent of local markets in Canada were in balanced market territory in October. Of the remaining markets, there was a handful more seller’s markets than buyers’ markets.

The number of months of inventory stood at six months at the end of October on a national basis, little changed from the end of September (6.1 months). It has remained stable at about six months since April. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in October 2011 stood at $362,899. This is up 5.5 per cent from October 2010, making it the smallest increase since January.

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas.

Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Overall residential sales brought the dollar volume to $1,493,498,796, an increase of 0.8 percent compared to one year ago.

While sales have been slightly behind last year’s results for most dwelling types, the condominium‐class property has been the notable exception . There have been 953 condominium sales year‐to‐date, a 2.8 percent increase compared to a year ago.

“The condominium market now comprises nearly twenty percent of our total residential sales,” says George Patton, President of KWAR. “This continues a growing trend towards condominium style living that’s been developing the last couple of years.”

Stronger demand for condominium type properties has helped push the average price up five percent on a year‐to‐date basis to $205,434. The average price of a detached home has increased 3.7 percent to $341,222, and the average price of all residential properties to the end of the third quarter was $300,201, an increase of 3.9 percent.

Home sales last month were down 4.7 percent compared to September 2010. There were a total of 487 residential properties sold last month, with an average price of $289,950, compared to $281,261 in September of 2010. The average price of a detached home sold last month was $330,608, a 0.9 percent increase relative to September 2010.

Patton says that interest rates continue to be low and it’s a great time for buyers who are entering the market for the first time, or those wishing to transition into a different kind of housing – whether that is trading up, or downsizing into something more convenient.

Consumers uncertain about current market conditions should work with a REALTOR® to develop an effective selling strategy. If you are buying, a REALTOR® will negotiate on your behalf and guide you through every step. A REALTOR® understands the local market and must, by law, look after your best interests.

The average sale price of all residential properties sold in KitchenerͲWaterloo and area rose 4.3 percent to $293,149, up from $280,985 one year ago. Condominium units increased 3.2 percent in August compared to last year to $208,238. Similarly, the average sale price of detached homes rose 3.3 percent
to $330,561 over August 2010.

Despite this increase in August sales compared to 2010, overall residential sales are down on a yearͲtoͲ
date basis from 4,615 to 4,476 units which signify a 3.0 percent decrease in transactions. Residential
sales are also down fr
m the month of July by 2.3percent which recorded 519 residential sales.

“There were a lot of positive numbers this August compared to the same month last year,” said George
Patton, President of KWAR. “Sales were brisk; we had a good amount of multiple offers reported. The
$300 to $350,000 price range was definitely the most popular with buyers in August, representing 14
percent of all sales for the month.”

Homes priced above $350,000 also saw significant activity and accounted for another 23 percent of sales
in the month of August. “The cooler weather signifies the beginning of the fall market – always a busier
time for real estate sales,” notes Patton.

Consumers uncertain about current market conditions should work with a REALTOR® to develop an effective selling strategy. If you are buying, a REALTOR® will negotiate on your behalf and guide you through every step. A REALTOR® understands the local market and must, by law, look after your best
interests.

Highlights:
• Sales activity was stable from July to August, but posted another big year-over-year gain reflecting weakened demand last summer.
• Year-to-date sales pulled ahead of 2010 levels for the first time this year, and remain in line with the ten-year average.
• The number of newly listed homes was also little changed from July to August.
• The national housing market stayed firmly entrenched in balanced territory.
• There were more balanced local markets in August than at any other time on record.
• The national average price posted another year-over-year gain in August, but has moderated from elevated levels earlier this year.
• Upward skewing of the national average price is diminishing due to fewer expensive sales and a declining share of national activity in Vancouver and Toronto.

For a second consecutive month, national home sales activity held steady in August 2011 when compared to the previous month.

Among major urban centres, Toronto and Ottawa posted a monthly increase in activity while Calgary, Montreal and Vancouver saw activity decline slightly.

“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, CREA President. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”

Actual (not seasonally adjusted) sales activity came in 15.8 per cent above national levels reported one year earlier. This was the largest year-over-year increase since last April, but largely reflects weakened activity one year ago.

A total of 324,030 homes have traded hands via Canadian MLS® Systems so far this year. While this stands only marginally above levels in the first eight months of last year, it nevertheless marks the first time this year that year-to-date activity has pulled ahead of 2010 levels.

As has been the case for much of this year, the year-to-date sales figure continues to run in line with the ten-year average.

The number of newly listed homes nationally was also little changed from July to August. This kept the national housing market firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 51.6 per cent in August, unchanged compared to July.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, 70 per cent of all local markets in Canada were in balanced market territory in August – a greater percentage than at any other time on record. There were just 12 buyers’ markets in August, which was the lowest figure so far this year.

The number of months of inventory stood at 6.2 months at the end of August on a national basis, which is little changed from the end of July (6.1 months). The national months of inventory figure has been stable at about six months since April. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in August 2011 stood at $349,916. This is 7.7 per cent above its year-ago level, which marked the low point for 2010.

The national average price has moderated compared to earlier this year, with sales activity in Vancouver, and more recently in Toronto, exerting less of an effect on the national average. Their share of provincial and national sales activity reached unusually elevated levels earlier this year, but has since receded in line with normal seasonal variations.

“Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said Gregory Klump, CREA’s Chief Economist. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas.

Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.

1 All figures in this release, unless otherwise noted, are seasonally adjusted to remove normal seasonal variation. Removing regular seasonal variations enables analysis of monthly changes and fundamental trends in the data.

Created: 09/15/2011 Modified: 09/15/2011

A number of downside risks to the Canadian economy identified by the Bank in July have since materialized, and headwinds to economic growth have intensified. The Bank ended its announcement by saying, “In saying, “In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished.”

“Chances that interest rates are headed higher this year are just about nil,” said Gregory Klump, CREA Chief Economist.  “The announcement gave important hints on how the Bank will revise its economic forecast in October. The bottom line is that interest rates are on hold until we see global economic growth prospects brighten, the earliest glimmer of which won’t be seen until late this year. Even then, doubts about the durability of a global economic recovery will persist until fiscal quagmires in the U.S. and Europe are resolved.”

 As of September 7^th, 2011, the advertised five-year lending rate stood at 5.39 per cent. This is down 0.15 percentage points from 5.54 per cent on July 19^th, when the Bank made its previous policy interest rate announcement.

 The Bank will make its next scheduled rate announcement on October 25^th, 2011.

http://creastats.crea.ca/natl/interest_rate_trends.htm

The Bank of Canada held its trend-setting Bank Rate at 1.25 per cent on May 31, 2011. This marks the sixth consecutive policy rate announcement for which interest rates have been kept on hold.

The Bank now sees headline inflation as staying above 3 per cent in the short term. It nonetheless maintained its inflation outlook included in its April Montary Policy Update, which indicated that inflation in Canada would hit two per cent by mid-2012.

“The Bank sets rates based on an inflation target of between one and three per cent, and it normally leans against inflation by raising interest rates. Leaving rates on hold in the face of higher inflation will likely become a communication challenge for the Bank,” said Gregory Klump, Chief Economist for The Canadian Real Estate Association.  “While the Bank said currently low interest rates will be raised ‘eventually’, there was little to suggest that the Bank is in any rush to do so.”

The Bank’s decision to keep its policy interest rates on hold follows recent comments by Finance Minister Jim Flaherty that he’s “quite worried” about the outlook for the global economy.  However, while global risks and their potential impact on the Canadian economic outlook remain elevated, the Bank has given itself plenty of room to justify raising interest rates.

“The Bank said it anticipates inflation expectations to remain well-anchored. If these expecations drift higher, or if productivity fails to recover, the Bank’s hand may be forced where it will have little choice but to raise interest rates,” said Klump. “There is little doubt that higher interest rates are on the way, but what’s equally certain is they won’t be going up very far or very fast.”

Financial markets have recently increased bets that interest rates are on hold until at least September. The prevailing view among economists is that the Bank Rate will be no more than three-quarters of a percentage point above its current level of one per cent.

As of May 31, 2011, the advertised five-year lending rate stood at 5.59 per cent. This is down one-tenth of a percentage point from 5.64 per cent on April 12^th, when the Bank made its previous policy interest rate announcement.

The Bank will make its next scheduled rate announcement on July 19, 2011