– Calgary Herald * Marty Hope
Resale housing activity in Canada recorded it largest month-over-month seasonally adjusted sales total in more than a dozen years, according to an industry report.
Activity was down from levels recorded in September in more than three-quarters of all Canadian housing markets, including the five most active major markets: Calgary, Edmonton, Toronto, Montreal, and Vancouver. Fewer sales in Toronto accounted for nearly one third of the decline in national activity.
“The breadth and depth of the drop in MLS activity suggests a major downshift in consumer psychology,” says Klump, “and that has moved many homebuyers to the sidelines until economic news begins to improve.”
The drop in sales activity resulted in a national resale housing market that’s more balanced than it has been in a decade, says the CREA report.
Seasonally adjusted dollar volume for MLS sales totalled $9.1 billion in October, down 17.7 percent from the previous month. Fewer transactions in Ontario, British Columbia and Alberta accounted for more than 90 percent of the monthly decline in national MLS dollar value.
“The gap between national sales activity and the number of new listings is at its widest since 1990,” says Klump. “This situation is unlikely to persist for long. New listings will decline, which will stabilize the market.”
Consumer confidence has declined to levels not seen since the mid-90s, which is reflected in the housing market trends, says CREA president Calvin Lindberg. “The major drop in consumer confidence and a steady stream of economic bad news from the financial markets is taking its toll on the national housing market. When consumers are not confident about their financial situation, they’re not active in the housing market, and that in turn impacts the economy more,” he says.
According to a study prepared for the Canadian Real Estate Association, overall economic consumer spending spinoffs from MLS transactions are $15.3 billion per year, including moving and renovation costs, as well as the purchase of new furniture and appliances.