Real Estate Market Information

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Canadian Market Overview
Date Released: August 2011

Housing starts edged up in July 2011

New Home Market - The seasonally adjusted annual rate1 of housing starts was 205,100 units in July, up 4.3 per cent from 196,600 units in June. Housing starts rose in July due to an increase in multiple starts in all regions except Quebec. Housing starts have been above the trend since February 2011, but moderation is expected in the coming months.

Urban starts increases in most regions - In July, the seasonally adjusted annual rate of urban starts increased in the Atlantic region (36.1 per cent), in British Columbia (33.0 per cent) and in Ontario (1.7 per cent). On the other hand, urban starts decreased in Quebec (-7.8 per cent) and in the Prairie Region (-0.3 per cent). The seasonally adjusted annual rate of rural starts was 19,900 units in July compared to 19,700 units in June.

Increase in urban multiple starts is partly offset by an decrease in single starts in July - The seasonally adjusted annual rate of urban2 starts increased by 4.7 per cent to 185,200 units in July compared to 176,900 units in June. Urban single starts edged down 7.8 per cent to 65,000 units, while urban multiple starts increased 13.0 per cent to 120,200 units in July.

Actual starts up in July - In July, actual urban starts increased 3.4 per cent compared to the same period in 2010. Actual urban single starts for July were down 11.2 per cent compared to a year earlier, while actual urban multiple starts edged higher 15.4 per cent in July compared to 2010. Estimated actual starts in rural and urban areas combined increased by an estimated 3.0 per cent in July compared to a year earlier.

New house prices are up in June - The New Housing Price Index (NHPI) increased 2.1 per cent in June compared to June 2010. This follows a year-over-year increase of 1.9 per cent in May. In June 2011, new home prices increased in 13 out of 21 centres, compared to June 2010. The largest increases in the NHPI were in Toronto and Oshawa (4.7 per cent), followed by Winnipeg (4.4 per cent) and St. John’s (4.3 per cent). The centres that registered the declines in the NHPI were Windsor (-4.3 per cent), Victoria (-1.7 per cent), Greater Sudbury and Thunder Bay (-1.0 per cent),cent), St. Catharines-Niagara (-0.6 per cent), Saint John, Fredericton and Moncton (-0.4 per cent), and Calgary (-0.3 per cent).

Existing Home Market - MLS®3 sales down in July. The seasonally adjusted annual rate of MLS® (Multiple Listing Service®) sales was down 0.1 per cent to 449,904 units in July, compared to 450,408 units in June.

MLS® new listings edged up in July - The seasonally adjusted annual rate of MLS® new listings in July was 868,992 up 0.9 per cent from 861,456 in June.

The Sales-to-New-Listings ratio remains in balanced market conditions - An indicator of price pressure in the existing home market is the sales-to-new-listings ratio4. New listings are a gauge of the supply of existing homes, while MLS® sales are a proxy for demand. The sales-to-new-listings ratio for Canada remained in balanced market conditions in July, at about 51.8 per cent. This compares to a sales-to-new-listings ratio of 52.3 per cent in June.

MLS® price decreases marginally - The July seasonally adjusted average MLS® price in Canada decreased marginally to $362,423, compared to $363,442 in June. The unadjusted MLS® average price was up 9.3 per cent in July to $361,181 from $330,532 a year ago.

Economic conditions - Labour market conditions and interest rates are key factors driving housing demand.
According to Statistics Canada, employment was little changed in July following three consecutive months of increases in employment. Full-time employment edged up by 25,500 jobs in July, while part-time employment decreased by 18,400 jobs.

Among the provinces, Alberta and Newfoundland and Labrador, were the only provinces with notable employment gains in July compared to June, while employment was little changed in the remaining provinces.

Source: Canada Mortgage and Housing Corporation