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September 22, 2012
TORONTO, ON, Sep 22, 2012/ Troy Media/ – Ontario’s re-sale housing market continued to cool in August from record high sales set in March. This is the third market downturn in the last five years.
Each downturn has been short, lasting less than a year, and each has been followed by a sharp upturn leading to a new record high. There is nothing on the horizon to indicate the current downturn will be any different. We forecast housing sales volume in Ontario will continue to decline through December, followed by resumed robust expansion.
Housing sales in Ontario via the Multiple Listing Service (MLS) totaled $5.87 billion in August, down 1.7 per cent from July and 14.8 per cent from March’s record high. All figures are seasonally adjusted.
Since March, unit sales have declined 13.9 per cent, while the average sale price has declined 1.1 per cent. We forecast unit sales will decline a further 15 per cent through December, while the average sale price will decline 2 per cent. A robust market expansion is predicted to begin early next year.
The current downturn in housing sales volume has varied among regions and has not occurred everywhere. Most board areas have seen declining sales, but several have seen robust growth.
Consumer price inflation in Ontario remained low in August as prices for natural gas, fresh fruit and vegetables, household furnishings, clothing and footwear declined from 12 months earlier.
Ontario’s Consumer Price Index (CPI) registered a year-over-year increase of 1.0 per cent, up from 0.7 per cent last month. On a monthly basis, August’s CPI increased 0.3 per cent from July, seasonally adjusted, ending a three-month decline.
The underlying inflation rate is well below 2 per cent and with modest to moderate economic growth and continued excess capacity, inflation pressure from the domestic economy is insignificant. We forecast Ontario consumers will see CPI inflation below 2 per cent this year and around 2 per cent in 2013, following a 3.1 per cent increase last year.
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