National residential property market activity edged higher for a second consecutive month in September 2010, according to the latest figures.
Combined with a falling supply of homes on the market, the number of months of inventory also declined for the second consecutive month says the report from the Canadian Real Estate Association (CREA).
Seasonally adjusted national sales activity increased 3% month on month, building on a monthly increase in sales activity in August. Sales in September reached their highest level since May 2009.
The report also shows that two thirds of local markets posted monthly increases in seasonally adjusted activity, led by Winnipeg, Calgary, and Montreal.
Actual (not seasonally adjusted) national sales activity in September 2010 was 19.8% below last year’s record for the month, but stands only slightly below September sales in the previous three years.
Record level sales activity late last year and earlier this year is expected to further stretch year on year comparisons in the months ahead, the report points out.
‘Supply and demand are rebalancing and that’s keeping prices steady in many markets. But local and national housing market conditions often differ,’ said Georges Pahud, CREA’s President.
The report shows that prices are stable. At $331,089, the national average price is on par with where it stood one year ago. September marks the second consecutive month in which average price remained even with compared to a year ago levels.
Weighted average price trends are also moderating. The national weighted average price climbed 3% year on year in September 2010, marking the sixth month of diminishing gains.
Similarly, the residential average price in Canada’s major markets rose 1.3% year on year, while the weighted major market average price increased 5.7%.
The seasonally adjusted number of months of inventory stood at 6.6 months at the end of September on a national basis, down from 6.9 months in August and 7.2 months in July.
‘Mortgage lending rates eased in the third quarter, which helped support sales activity over the past couple of months. Interest rates are going nowhere fast, so home ownership will remain within reach for many homebuyers,’ said Gregory Klump, CREA’s Chief Economist.
‘Since Canada’s interest rate outlook is tied to a weakening outlook for economic and job growth, the consumer sentiment will remain pressured until economic prospects would have improved next year. In the meantime, many Canadians will be focused on paying down their debts in anticipation of interest increases next year. That means the continuation of low and stable interest rates is unlikely to cause housing demand or prices to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time,’ he added.