MLS listings reach record high

Surge in Real Estate Listings Slows Home Price Increases

A surge in real estate listings in Canada’s major markets slowed down the pace of price increases in April, according to a report released Wednesday by the Canadian Real Estate Association (CREA). The number of new listings of homes for sale on the Multiple Listing Service (MLS) reached its highest level ever in April, the CREA report said, with a seasonally adjusted 52,775 units coming on to the market - an increase of 1.8% from the previous month. Unadjusted new listings were up 17.7% from April 2007.

Meanwhile, the number of units sold in April was 34,781, down 6.1% from the same month last year. The average selling price was up 3.2% to $334,293 from $323,936 in April 2007. This is the smallest year-over-year price increase in over six years, CREA reported.

The increase in listings “means buyers face less competition in their search for a home,” said CREA President Calvin Lindberg.

The sales drop and the modest price gain are well down from years of double-digit increases and are further confirmation that the boom days are over, said BMO deputy chief economist Doug Porter. No city in the country has reported a price decline from year-ago levels over the first four months of the year, Porter noted, “so the slowdown is still far from mimicking the U.S. experience. However, we would point out that new listings have climbed more than 8% this year, even as sales have slid.”

CREA may term that as a more balanced market, Porter said. “That’s a polite way of saying: If you’re looking for double-digit price gains, dream on.”

CREA said the new record in listings resulted largely from activity in Toronto and Saskatoon. The rise in new listings in these markets more than offset a decline in Edmonton and Calgary, where new listings retreated from record levels reached in March, the association said.

Seasonally adjusted sales activity edged up 0.8% month-over-month to 27,039 units in April, with stronger markets in Quebec City, Toronto, Winnipeg, Halifax-Dartmouth, Hamilton-Burlington, St. Catharines and Newfoundland & Labrador offsetting slower markets in Vancouver, London & St. Thomas, Calgary and Victoria.

“An increase in listings is resulting in a more balanced resale housing market in Vancouver, Calgary, Toronto and Montreal, the four most active of Canada’s major markets,” said CREA chief economist Gregory Klump. “New listings are forecast to rise further as sales activity continues retreating from the peak last year, resulting in an increasingly balanced resale housing market and smaller home price increases.”