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Canada's housing market both vigorous and stable
3 F! a s& p- m9 j1 _/ d) L* I/ l* r }5 c5 D
- Country's market poised to show growth throughout 2006 -
7 ?+ O9 O$ v+ j7 o( p2 h: f
& Z( w/ z, w3 v, A) d TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
) a. c, o- T! Z+ q, r3 |) a; kexhibited moderate price increases and stable unit sales during the third& t0 v ^" n8 g2 |
quarter. Wide regional variances continued to be the dominant characteristic' t/ s: X$ B& r: ~+ b2 q, _# N( w) W
in the market, exemplified by frenzied levels of activity and double digit
/ \! [8 S: y6 o: ~price gains observed in the energy and commodity rich Western provinces, and
( d2 o) C: y5 t" S2 j: {9 H! C. Rmore reasonable sales volumes and moderate price appreciation in Ontario,7 q$ b0 q+ O# r! q F" J$ A9 @; Z* E
Quebec and Atlantic Canada, according to a report released today by Royal7 F# {/ V" W, o; }9 j1 Y
LePage Real Estate Services., _6 T/ d( @8 r' ]
# x* c7 P3 e# o% J
Nationally, market trends established through the first three quarters
# L/ |3 w4 S& E. S4 N" Vare forecast to continue for the remainder of the year. Robust economic$ A+ o; [' u2 p" E& H6 \5 B8 H
conditions, low unemployment rates, modestly growing salaries and wages, and/ t% [2 ^" i q* {. F
sound consumer confidence contributed to the overall strength of the
$ ^) @( _/ E3 B& Xresidential real estate sector.! h& a4 a+ w# k& W- S
% Y: O) _; V5 N Of the housing types surveyed, the highest average price appreciation8 k; ]* Y/ C F/ ?0 [
occurred in detached bungalows, which rose to $300,365 (+16.3%)0 v! u) g( O9 f3 x' `
year-over-year, followed by standard condominiums, which rose to $211,562
- g) G1 ]" k( D7 ?0 D, h4 E/ R(+14.2%), and standard two-storey properties, which increased to $365,3802 \6 h% L! s% X6 U4 ]
(+13.2%).
' p) h% O3 C6 S; W
; E3 S, T y0 J! ?* W9 E "Canada's sturdy housing market continued to demonstrate steady growth
6 O) D. J5 }7 U2 {# N- P8 [during the third quarter. For all but the west, we have moved on from the: o6 m/ H- G5 r7 w" b5 ]
frenzied expansion that characterized the first half of this decade, and are
/ \8 J+ i5 i, c/ M) F* E/ F; Rpoised to show continued growth at a more moderate pace," said Phil Soper,3 p" }" W! ?% S6 z8 l. D9 m% q
president and chief executive officer, Royal LePage Real Estate Services.
3 \ G1 G) z; S! d) y"Gone is the sellers' market that we have lived with for some years. We
- {# ^+ L+ {' F* T' O' Pwelcome the more reliable conditions that are characteristic of a healthy
% f" R7 a: G# k+ Y+ L. F; R8 l1 w0 Cbalanced market."
# B' A( I3 h5 h0 u+ @% k- x' p' s
( B% X8 H+ b+ M" I' l4 ]) N Despite the double-digit rise in average national house prices,
7 Q$ I0 S9 @ jconsiderable regional variances were exhibited again this quarter. The shift
* ?) Q* ^9 j2 F$ r, u" wto balanced market conditions, which began in late 2005, has continued, C6 q( m8 R' _/ }7 j
throughout most of the Central and Eastern regions of the country. In the core- s# ], R2 u+ \" G# n
energy producing western provinces, the combination of very high in-migration,
) n; W2 }9 W! c! o6 a& Jmanageable affordability, and a shortage of inventory has driven record
8 s" V# V5 C7 ^6 c }' }' t# jbreaking price appreciations.
7 L: _) J2 V, G+ b& P
. V" `( l6 o8 D/ H" H( p* n Echoing the second quarter and supported by Alberta's rapidly expanding% f% C. q& m: z: ^! \
economy, Calgary and Edmonton led the charge of Canadian cities with the
* M4 I" s0 A! h6 a# M. Ilargest house price appreciation in all housing types surveyed./ T* Y! x- ]& f$ K( d- L+ D( ~
8 T2 Q) a3 S' v& A. N
In Ottawa and Toronto, growth remained steady, supported by solid
! A `" e5 q$ i3 \economic fundamentals, an increase in available inventory and strong consumer
; D, j+ b7 O8 |! P6 a8 }confidence. While the pace of price appreciation in Ontario leveled off/ h# ~7 q d8 `
slightly, the province's real estate market remains poised for modest growth.
A, g" |1 z4 ]) I i, ?& |# |$ NIn Atlantic Canada, new housing and condominium construction offered buyers' _& Z5 X5 X& {7 H: ~4 ~
greater selection at more competitive prices, resulting in a slower rate of3 y) G' L3 l& D6 Z
price appreciation when compared with 2005.
' R- k7 c5 G$ L4 `- x3 p9 S0 `1 t7 V% \$ V
While the pace of growth in Canada has slowed, the domestic housing) [$ w, ]& p, H
market is expected to outperform the American market. The economic and& J. Q7 W4 z( G: Y
financial fundamentals driving the residential real estate sector in Canada# t& W! N& ~% w# d
are markedly different than those found in the United States.
+ Z/ B) j+ r: i! X4 e8 m, n; J8 W$ R; a! o# M# i# w6 ^+ E
Added Soper: "Canada's housing market is likely to outperform the
+ N* @6 b1 w* ]" dAmerican market through 2007. A number of factors are working in Canada's
% {: W; u7 K }/ W" Sfavour, including healthy personal and governmental debt levels, the
/ Y8 t# i& K" \8 p [relatively modest rise in interest rates in our country, and general
7 X7 [# k7 X9 I6 N8 j' @affordability in our major cities. In addition, Americans are now seeing the6 Z; a+ f- C* k) ~4 Q! z
downside of a tax system that encourages maximum homeowner leverage, and
( f# z/ R a c- t4 qaggressive financial products such as zero- and negative-amortization4 a0 ]4 d/ g* Q' ?, {8 K/ {
mortgages that work only in a high price growth environment."' T2 z( z1 ^/ z( | M
) a, A% F/ l% {1 z2 }& I% n
<<1 g" z: c+ X: u9 [% l$ m- e1 \( ^
REGIONAL SUMMARIES
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* i6 Z1 ?2 S. E* I0 T, Z
5 M0 [2 P" g. n; ~2 E* A Balanced conditions continued to characterize the housing market in
" t0 k- x! n- w7 [Halifax, as significantly higher inventory levels helped to moderate the rate
. C% L# D/ l7 w5 q! `of price appreciation. Buyers were increasingly choosy, taking more time
6 N0 }& }1 G) n& V6 H9 xlooking for newer, low-maintenance properties that were not in need of
4 H. A) W+ k) H! P4 ^& }. Qrenovations.) v* A7 t c3 ~4 ~; V( k5 G
/ o' p: _! K2 J( D+ @7 m
The housing market in Moncton remained healthy and strong as a slight( j' T7 G$ D! @0 e5 ~
increase in inventory helped to moderate the rate of price appreciation: S+ e7 j. [/ T& ?
compared to the same period in 2005. Activity was brisk throughout August and
: |& l: Q; j4 H) f2 _9 xSeptember and is expected to remain this way through the fourth quarter.
6 q( b0 N6 x# o- G% ~' |
& h# O6 r; Q& c( T9 x1 {1 i The housing market in Saint John underwent its traditional summer! m5 h" L/ U) _9 c4 A# _
slowdown in the third quarter, with activity picking up towards the end of the: h; }. ]3 b J- d0 g
quarter. The local economy continued to thrive, as construction on a new9 N2 S: U& @$ q9 s" J h( C" u8 ?
600,000 square-foot shopping area has begun, bringing several new box stores }9 Z0 |1 ^% {( s7 l
to the area. Buyers have begun seeking less expensive fixtures for their homes
5 y( b/ L! W0 O; a4 Y% w$ Qand are instead opting for more affordable housing options.
[' O9 A c+ O" a" F0 I8 ]
* B! B6 N6 u) u! | In Charlottetown, the housing market started to move towards balanced
, J# K1 t/ K2 v! Fconditions, as some sellers had to begin to lower the asking prices on their
- L' z" q. [- Y# Y1 Zhomes to make them more competitive. Activity from out-of-town and US buyers1 Z& x) _. o- `
was down slightly compared to 2005, likely attributable to the strong Canadian
3 {3 X3 ^: C h( ]& o( v3 Gdollar. Inventory levels began to creep up in the third quarter, providing
* }: R4 i: d" z, ^8 R5 Y* M: J2 K4 Ibuyers with more options when looking for a home.. p+ w' F X0 S; C2 [8 O
- h$ V: N; X: u! [. E) |
Activity in St. John's slowed slightly in the third quarter, particularly0 W6 ^" l. C' i+ z4 y
among higher-priced properties, where there was a slight over-supply of homes5 O6 D7 q. S2 m# M
priced over $200,000. Listing periods have increased when compared with 2005,. W1 Q. q% w+ B; p6 p( L- g, B) H
as some of the pent-up demand that had characterized the market over the last& x" Z. Q- i3 z* V
few years has been satisfied, resulting in more normal, balanced conditions.
; S; l# B( D; _; Z7 V
; i* M" J Z% o* ~0 @ Montreal's housing market recorded modest increases in average house# S# e: j' N3 F- _
prices, due to a slight seasonal slowdown in the third quarter as inventory7 r" f+ M% Z9 E/ b
levels rose. Part of this can be attributed to the fact that many renting
7 @2 s8 i& f S# @& E/ wfirst-time buyers were motivated to close on the purchase of a home by July 1,! N5 ]9 C5 }! E3 j
when rental leases expire in Quebec. Once this date has passed some of the8 m g. ?# R+ G: Z
pressure is taken off the market, allowing buyers to visit more homes before8 K$ T# U1 l' Y% _( U
making a purchase.1 @% }5 [, d7 b1 J' M9 ~) l
% X% T: [. _4 h# w' ]* c$ r
Ottawa held its position as one of the country's most stable housing* {0 t& M% |% @* Z, g
markets in the third quarter, reinforced by a vibrant local economy and strong
6 H- |9 G) `% Y( M7 xconfidence, resulting in modest increases in average house prices. The city
( \! M, ^& A ]( v3 U( G- k7 K1 f9 wcentre remained a bright spot in Ottawa, with homes in this area attracting. ~; f+ p+ h9 z) r9 S
attention due to their convenient location and proximity to downtown( ]# a3 J0 _/ m* q: q4 [
amenities.
; q% o& w m& { v+ |. g, t( d% q( G% @9 d% ^
The housing market in Toronto sustained healthy activity levels
6 `: O1 [- i6 `, d3 [5 Gthroughout the third quarter, as a strong economy helped to maintain demand, ]# q1 B9 B& C
across the city, causing average house prices to rise moderately. Toronto has; \ Z( t. \1 ~4 N) v
continued to experience modest growth in average house prices, and has been
% d+ j% V+ }: C5 m( jdriven primarily by purchasers who are buying homes as their principle7 L. F5 [8 ^1 ?1 _% K) @2 g
residence, rather than for investment.7 a& N2 h9 t' ]+ l& a
( [7 J6 z/ Z: B+ _3 l- Q+ O The vibrant Winnipeg housing market continued to show its strength as4 _& Y F' o8 w* I8 l
house prices rose during the third quarter. The booming local economy resulted
0 r( k* k V: Z+ q) qin a historically low unemployment rate, helping to bolster consumer9 M; ~- y' p! R. [% ?; K
confidence and Winnipeg's ranking as the city with the lowest capitalization
, C4 Z/ O8 D& r( Q) \ prate among the country's larger cities - helped to encourage buyers to enter. X( z( ?8 [/ K3 N9 u- Z% z
the market.
1 r/ A0 S/ D% H4 I& g0 Q% D4 A
" q: X8 \6 e1 f+ s+ j* o0 K7 \, X: } In Regina, the market experienced a slight seasonal slowdown through
$ k4 C7 e' B1 v7 V# j; AJuly, as there were fewer purchasers in the market due to summer vacations. In1 |, ~! m( E8 U |$ ]( W9 @1 F
August, activity resumed to the busy pace previously seen in the spring
8 P* V9 C8 J4 E" ^months, as the influx of purchasers made it more difficult to find a home due
+ @4 a) i) b- x' Y/ Zto the shortage of available inventory.
" Y0 B1 d. I, |5 D; p6 K$ T
1 m* J1 X# Y$ I: b7 E! L Activity in Saskatoon remained brisk as the market maintained its* @" W4 p0 k3 Z
momentum from the busy spring sales period. The economy in Saskatoon remains0 I/ c1 A& j# F
vibrant, as employment opportunities are abundant with many businesses/ _& l% {# l0 C/ H) z- z
struggling to make hires and having to recruit outside the province.5 ]) h: e/ B1 N4 j$ o6 G
& ^. _6 d% z O. K4 [' n Calgary's housing market recorded blazing average house price increases
; w' Y$ `$ t: W: E1 {/ M. [, M a; Kin the third quarter, in all surveyed categories. The burgeoning economy, low5 g. s. @( v5 J# L. }
unemployment rates and low inventory levels remained the leading factors that$ @, X. S# l0 V/ x2 u5 C2 B
pressured Calgary's house prices upwards. However, regardless of the soaring9 m# z3 R3 r" E r$ T* J
prices that characterized the market - even during the typically slower summer
$ g! ~/ z# K3 i. l6 wseason - it is expected that activity will become slightly more balanced, as
* Z. f& D3 @4 g) A( m# dbuyers are becoming more reluctant to participate in the frenetic activity.
3 ?& z9 v% |$ _1 a" i. r7 p: s/ }9 F. f0 D, J
Edmonton's booming local economy continued to thrive in the third quarter+ L& J4 f# ^4 n% k; E: A3 i
as activity in the oil sands north of the city continued to flourish. Edmonton! T+ o: y) T0 y6 M2 Z0 v- _& `
remained the hub of activity for those coming to work in the oil industry,( J( q9 u6 K( z, t: Z# Z
maintaining tight inventory levels across the city, resulting in prices3 h4 U M c T8 x8 s$ S
increasing at record levels. However, as inventory levels continued to improve; F G6 f8 U2 W6 i3 L+ |
in the third quarter the rate of price appreciation should moderate slightly
2 h* b% Q# ]3 j: X/ U9 atowards the end of 2006.
# F) v0 ?8 H0 w7 m
- i4 X0 Y7 E3 x1 p1 h6 w" K+ jWhile Vancouver has seen a slight reprieve from the severe shortage of3 R" |% b7 A0 Y, ]" c
inventory that had previously characterized the market, supply is still unable1 _- q/ V- N' V& ]% N: g1 E
to meet demand, driving house prices upwards. Vancouver has a very diverse; d+ F' |+ K0 H+ E! ]- F
group of active buyers - from first-time home buyers to baby-boomers to L6 j# L( d, \
foreign investors - all of whom fuel the demand for houses, placing added' U" q1 g$ q. @1 x. S1 x
pressure on tight inventory levels.
& N) u; |, V* G. @, i2 M3 \7 q) F( M* I7 M9 w9 E
Victoria's market is vibrant and supported by strong economic: ~' R7 X/ K+ k/ k5 E# w
fundamentals, fuelled by a booming tech sector and a migration of young people* F7 a5 \* |) v0 E6 v# Q
into the city that has continued to support the area's house price increases;
! z. w. w1 \2 ?% j5 j! `while increased inventory levels have afforded buyers more time when searching
9 Z# \% F1 ^" ~2 g5 z" J$ _for a home, helping to normalize the market's pace.
) n# x$ t2 m) G; T2 J( t K# N1 g* Z6 [1 g5 }% V
<</ G/ e; j) [& H# m" e, k! U8 N
Survey of Canadian Average House Prices in the Third Quarter 2006, X4 U4 t2 k6 J2 r
, B* b( B1 P! x+ b
-------------------------------------------------------------------------# d1 h" H. V, d' `' r, |
Detached Bungalows Standard Two Storey
: @1 I7 p; v$ D+ Z* } -------------------------------------------------------------------------, G& W# G, h/ ?' E+ Y4 T
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q35 A1 g' m* l$ l
Market Average Average % Change Average Average
$ p6 k! \- c I' u -------------------------------------------------------------------------
3 e0 i% o C* ?) A Halifax 186,333 173,333 7.5% 198,667 199,000+ Z& F3 m3 Y8 c
-------------------------------------------------------------------------
" I' A$ k0 N7 k4 @$ i Charlottetown 145,000 141,000 2.8% 175,000 170,0009 ` _8 C( k7 Y9 j
-------------------------------------------------------------------------
: |0 D4 {* ~( i: L Moncton 135,000 127,000 6.3% 129,000 123,0005 f; |- {- f" m- y+ m
-------------------------------------------------------------------------, B+ y7 ] H; @
Saint John 141,200 142,900 -1.2% - -
b- H3 u( N& O9 i- M8 B+ y# Q -------------------------------------------------------------------------# g p @: P% u
St. John's 143,667 142,667 0.7% 200,667 202,333
4 w. x, b% I0 R9 v -------------------------------------------------------------------------; e* b) x5 x1 h! B% v" R. h
Atlantic 150,240 145,380 3.3% 175,833 173,583
- C: C3 x3 Y. a2 e -------------------------------------------------------------------------, T7 b) Z& a+ \, F$ `! |' _6 d2 t
Montreal 213,691 203,500 5.0% 321,141 316,1856 [: d) ] n$ B6 z& } n! k
-------------------------------------------------------------------------
. x& f: v2 l( K Ottawa 290,083 278,417 4.2% 285,667 273,250
2 x1 z* n- d5 @+ _# V/ T -------------------------------------------------------------------------
9 {; }4 e3 B. v$ j3 z Toronto 373,368 355,882 4.9% 481,523 474,766( J8 v& j3 @/ F- D- w) o5 }, q
-------------------------------------------------------------------------& l$ ^' J& \# s" f' U4 t+ Q
Winnipeg 181,579 159,860 13.6% 202,337 180,707* h2 A$ s+ B& K; j2 y
-------------------------------------------------------------------------/ U! \( p" W2 T! g
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
5 {; K& U. g% D1 a- v -------------------------------------------------------------------------9 b0 K0 V% j: g/ U0 H( f
Calgary 395,067 252,411 56.5% 405,778 264,3891 }$ t4 {% _% V+ O" r7 Q
-------------------------------------------------------------------------
& d: n- `: }! Q4 |8 p/ Y Edmonton 286,857 194,857 47.2% 316,429 206,714
& \ g) A: f: h* i+ B -------------------------------------------------------------------------+ W0 D, H% _9 v2 v
Vancouver 704,250 601,000 17.2% 794,000 697,500
( `( O. C! i, B! ~ x$ f: K( n. D4 m -------------------------------------------------------------------------
; u0 l7 H+ d- b; u) z Victoria 375,000 348,000 7.8% 403,000 391,000- R2 y* ~+ e0 k2 M+ f4 \
-------------------------------------------------------------------------
+ s+ U. g# S! n r2 ^' b National 300,365 258,202 16.3% 365,380 322,860; E( Y7 K0 r# q
-------------------------------------------------------------------------# ]% T) ~0 n# D7 G$ n( Z* j( N1 ^
8 c6 w0 ~4 |! M7 `, \' Q
-------------------------------------------------------------' u. [9 A3 i" b* F2 s
Standard Condominium
|3 d$ [/ B+ Z; c -------------------------------------------------------------
1 M4 u# p3 f# `, x 2-Storey 2006 Q3 2005 Q3 Condo8 a: P3 a \# Y/ Z
Market % Change Average Average % Change
" x6 T4 d0 D4 E2 }* F! E9 f -------------------------------------------------------------
$ x5 k9 y0 \( a5 `. N- M: I+ s+ w Halifax -0.2% 142,000 103,000 37.9%
6 T3 k% F3 b1 O& \0 U h7 y. Y4 F -------------------------------------------------------------
( h2 f. ]# g( Y% E7 ] M2 d- W+ f4 ^ Charlottetown 2.9% 98,000 98,000 0.0%
+ ?3 j, I- u" H% O" f. L- f4 {" B: ~ -------------------------------------------------------------6 N! L. y6 T9 _' A) O( B! T; E% \ j
Moncton 4.9% - - N/A- ` y8 k" h) M
-------------------------------------------------------------
* @! c N3 ~' m: \. f Saint John N/A - - N/A
" u; e4 a( a; x2 v; y/ R, _ -------------------------------------------------------------
6 h( B3 S, S' I St. John's -0.8% 146,333 145,667 0.5%
% m$ i# z1 ]% R" a) r7 v5 @ -------------------------------------------------------------* b$ { E" m4 L, K* I8 K
Atlantic 1.3% 128,778 115,556 11.4%
) p% T5 O' N$ e1 q1 o: K3 F -------------------------------------------------------------
; E' Q3 e+ h0 k. I Montreal 1.6% 193,190 188,016 2.8%! p9 k8 ?- h* a. O7 g
-------------------------------------------------------------
: E, x! D! O- E# j& m1 u; C Ottawa 4.5% 181,083 172,250 5.1%
8 a2 M Y0 D! k; B -------------------------------------------------------------
- E1 r7 A1 v6 } Toronto 1.4% 252,088 242,918 3.8%
* B3 W7 o# B; M -------------------------------------------------------------4 D0 r$ U1 H6 B) b; a0 r9 k" ^
Winnipeg 12.0% 105,648 96,008 10.0%8 x8 {" ^; s$ u" m; @
-------------------------------------------------------------5 E% _) ]+ B1 ~$ W- @1 P N
Saskatchewan 9.7% 106,250 101,000 5.2%- a4 [& z% `! ]0 Z7 k
-------------------------------------------------------------$ E0 X$ m* b( j- f' j
Calgary 53.5% 245,844 153,867 59.8%
, o, j7 }# _6 h1 I) @" ~2 [ -------------------------------------------------------------
1 p' P: w u& `6 x0 o Edmonton 53.1% 200,433 131,500 52.4%
; z- [" W" y t% P% Z2 W* _: Y0 H* } -------------------------------------------------------------* j- X9 O+ x2 m. c( x2 N5 `
Vancouver 13.8% 366,250 323,250 13.3%
$ H9 ~4 ?$ T% f# k I -------------------------------------------------------------
1 h' X# b# U0 q9 e h, b# j Victoria 3.1% 229,000 220,000 4.1%
8 u* j' c+ B* _6 p -------------------------------------------------------------& y- |' I* m% N& ?, n
National 13.2% 211,562 185,296 14.2%* G6 l3 F" E# m# d5 c
-------------------------------------------------------------
' {7 y6 r5 N* W" r >>
5 i0 c6 M, `5 S$ w9 t2 @" J: I
Average house prices are based on an average of all sub-markets examined
& b& I8 h, |! m+ [) |in the area, except for the smaller markets of Charlottetown, Moncton, Saint
* L) {! @( ]) rJohn and Victoria.
, V7 p+ a& ^5 U& N. z* Z
7 D: e3 K0 {8 ^7 F: c The Royal LePage Survey of Canadian House Prices is the largest, most
$ t' Y6 d; r: A2 i" _comprehensive study of its kind in Canada, with information on seven types of
I! Y3 B1 n4 W, |0 }housing in over 250 neighbourhoods from coast to coast. This release
" N6 I8 ]7 Y7 c6 } Z( f* Z* q; kreferences an abbreviated version of the survey, which highlights house price
. T; B( l9 D! i! f( `5 F( M/ xtrends for the three most common types of housing in Canada in 80 communities
$ n& u0 K% p! Y; E; m" bacross the country. A complete database of past and present surveys is
+ O. O, V. ~2 }; r3 b" |) yavailable on the Royal LePage Web site at www.royallepage.ca, and current& X+ ?' \7 f2 S$ n' R; g! r' |$ G; ^ @
figures will be updated following the end of the third quarter. A printable
4 U- J S1 J6 Rversion of the third quarter 2006 survey will be available online on
8 k7 r6 {" `2 f* t( {& N$ Y0 oNovember 15, 2006.
; T9 ]0 C# o! I- N Housing values in the Royal LePage Survey are Royal LePage opinions of
6 i* W9 _/ n- r7 Wfair market value in each location, based on local data and market knowledge
- c; B3 F2 v+ fprovided by Royal LePage residential real estate experts. Historical data is
) b5 R) r' P: F. Y1 X) X$ m5 kavailable for some areas back to the early 1970s. |
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