According to statistics released by The Canadian Real Estate Association (CREA), national resale housing activity picked up in September 2011.

Highlights:

• Sales activity rose 2.7% in September from the previous month.
• Holding in line with the ten-year average, activity during the first nine months of this year pulled ahead of sales over the same period last year.
• The number of newly listed homes held steady when compared to the previous month.
• The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory.
• The national average price posted the smallest year-over-year increase since January.
  National sales activity rose 2.7% in September when compared to August, and follows three months of stable activity. September’s increase reflects strengthened activity in a number of major markets, led by Toronto. The monthly increase pushed national sales to its highest level since recently tightened mortgage regulations dampened sales earlier this year.

Actual (not seasonally adjusted) national sales activity came in 11% above levels in September 2010. As was the case over the summer, the year-over-year increase reflects weakened activity one year ago.

A total of 361,749 homes have traded hands via Canadian MLS® Systems to date this year. This is 1.2% above levels for the same period in 2010, and in line with the ten-year average.

“The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy,” said Gary Morse, CREA President. “Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended. That said, housing market trends often diverge from national trends due to local factors, so buyers and sellers should talk to a local REALTOR® to understand housing market trends at play where they live.”

The number of newly listed homes nationally was little changed from each of the previous two months. New listings were up from the previous month in a number of major markets including Toronto, Montreal, Ottawa, Oakville and Vancouver, offset by fewer new listings in other markets including Edmonton and the Fraser Valley.

The monthly rise in sales resulted in a tighter national housing market that remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 52.8% in September, up from 51.6% in August.

Based on a sales-to-new listings ratio of between 40% to 60%, nearly two-thirds of all local markets in Canada were in balanced market territory in September, with an even split of buyer’s and seller’s markets among the remainder.

The number of months of inventory stood at 6.1 months at the end of September on a national basis, little changed from the end of August (6.2 months). It represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of balance between housing supply and demand. Months of inventory have held steady at about six months since April.

The actual (not seasonally adjusted) national average price for homes sold in September 2011 stood at just under $352,600, remaining below record level heights reached earlier this year. While up 6.5% from September 2010, the year-over-year increase is the smallest since January.

“Canada’s housing market remains stable amid continuing financial market volatility, contributing to Canadians’ confidence in the economy and providing support for Canadian economic growth,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert. Both of these developments are good news for the housing market.”

The seasonally adjusted annual rate of housing starts was 205,900 units in September, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 191,900 units in August 2011.

“Housing starts picked up in September due to an increase in multiple starts in the Atlantic region, Quebec and in British Columbia,” said Mathieu Laberge, Deputy Chief Economist at CMHC’s Market Analysis Centre. “Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term.”

The seasonally adjusted annual rate of urban starts increased by 8% to 185,900 units in September. Multiple urban starts were up by 14.2% to 118,000 units, while urban single starts decreased by 1.5% in September to 67,900 units.

September’s seasonally adjusted annual rate of urban starts increased by 47%  in the Atlantic region, 32% in Quebec and by 18.6% in British Columbia, while urban starts decreased by 3.5% in Ontario and by 12.1% in the Prairie region.

Rural starts were estimated at a seasonally adjusted annual rate of 20,000 units in September.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.