Housing activity continues to ease

ROMA LUCIW

Globe and Mail Update

Existing home sales will likely close the year at record levels, but evidence of a ”soft landing” is building as the furious pace of activity in the housing market gives way to the most balanced conditions in more than five years, according to the Canadian Real Estate Association.

Sales of homes that were not brand new, as measured through the Multiple Listing Service, reached 82,119 units on a seasonally adjusted basis in the third quarter of this year, a 2.5 per cent slide from the previous quarter.

”With the housing market becoming more balanced, price gains are slowing down in a number of major markets,” said CREA chief economist Gregory Klump. The CREA expects those trends will continue over the rest of the year and into 2007.

Vancouver, Calgary and Toronto experienced the largest drops in sales, although activity in Edmonton and Thunder Bay rose to quarterly records. Hamilton's housing market was also strong in the third quarter.
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CREA said the third-quarter numbers show that the housing market is becoming more balanced, resulting in smaller price increases. The dollar value of existing home sales slumped 2.7 per cent in the third quarter from the second although new listings climbed 3.8 per cent to 143,760.

"The quarterly decline in sales combined with an increase in new listings caused the resale housing market to become more balanced than in any other quarter in the past 5.5 years," CREA said.

In the first nine months of the year, transactions are above year-earlier levels and rose 1.4 per cent and sales are still on track to set a record in 2006.