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Canada's housing market both vigorous and stable
& [7 l' i- f$ ^0 T% Y8 a
3 ?' q' F$ S9 T- Country's market poised to show growth throughout 2006 -
8 l7 d4 q) W& U! q# M0 m$ O' f( z$ s
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market1 Y& G! j7 W6 O$ h% K6 D
exhibited moderate price increases and stable unit sales during the third
: L+ a. o: ?/ n! e3 T I( c! W1 q$ Q( Mquarter. Wide regional variances continued to be the dominant characteristic: E: T& J7 C; ?" i1 r- Q
in the market, exemplified by frenzied levels of activity and double digit
$ F8 c; b& ~1 s; l- n2 _; g$ Lprice gains observed in the energy and commodity rich Western provinces, and _8 p+ c# k3 A0 Y9 | a
more reasonable sales volumes and moderate price appreciation in Ontario,6 n# G# r E# ~2 j
Quebec and Atlantic Canada, according to a report released today by Royal* w. b1 d7 [9 K9 k
LePage Real Estate Services.: Z8 G& ]1 t. q3 S
- G5 s8 C' i4 d' Y8 { Nationally, market trends established through the first three quarters2 h0 r4 [9 X E8 @
are forecast to continue for the remainder of the year. Robust economic& Y8 g3 [$ w0 y' ^; d/ M
conditions, low unemployment rates, modestly growing salaries and wages, and
* S# x8 i9 i/ E5 usound consumer confidence contributed to the overall strength of the8 J, _1 }5 ?# s: f9 M
residential real estate sector.% D5 u- z: w8 R* [7 U
, s) O6 L G+ W
Of the housing types surveyed, the highest average price appreciation7 ~, {+ V7 `4 V* q: M
occurred in detached bungalows, which rose to $300,365 (+16.3%)* S# j8 h. F# k
year-over-year, followed by standard condominiums, which rose to $211,562
% W% p! p9 V2 Q& E1 I(+14.2%), and standard two-storey properties, which increased to $365,380
% e1 a/ u; o1 Q& [) w( B(+13.2%).
# i8 _0 k4 v6 P X0 @. a
: M A- b" k! }1 | "Canada's sturdy housing market continued to demonstrate steady growth# ~1 p5 S4 W0 `6 S |
during the third quarter. For all but the west, we have moved on from the3 _4 p. p. _# H
frenzied expansion that characterized the first half of this decade, and are3 t" u" ]. u. i4 y/ i: E
poised to show continued growth at a more moderate pace," said Phil Soper,
- I* T) `; X7 ?$ B2 C3 [president and chief executive officer, Royal LePage Real Estate Services." D2 U- ?2 Z- Y) ]2 [% b- q
"Gone is the sellers' market that we have lived with for some years. We
" m% u- q: J2 T/ cwelcome the more reliable conditions that are characteristic of a healthy2 C T# j2 d, y/ r
balanced market."
& ?0 X& L+ i0 B1 u3 Y5 O! j. i% Z4 f& a p5 F( A% ^6 ?2 d* ?5 Y
Despite the double-digit rise in average national house prices,; z1 T" ` u- p
considerable regional variances were exhibited again this quarter. The shift: k: d# w8 G/ W6 G+ K! ~+ l
to balanced market conditions, which began in late 2005, has continued( g) q: S9 k' k% I
throughout most of the Central and Eastern regions of the country. In the core
k; _+ j: o6 i- g" u5 Q* v6 K+ Tenergy producing western provinces, the combination of very high in-migration,
/ @* E, E0 [4 p& \/ Vmanageable affordability, and a shortage of inventory has driven record
' d! T. P3 ~& k1 z/ a+ P& obreaking price appreciations.
, J4 }$ c2 P0 V8 N0 x1 z, e* V2 G: {+ s3 T7 a0 k0 I5 e. a# b
Echoing the second quarter and supported by Alberta's rapidly expanding
3 H7 L9 m( [- ?5 C ueconomy, Calgary and Edmonton led the charge of Canadian cities with the
$ j- z. E1 D! b2 ?9 n8 jlargest house price appreciation in all housing types surveyed. Y# Q( }: R4 B
* H1 |0 g+ N: Z5 g; v In Ottawa and Toronto, growth remained steady, supported by solid/ K( g% J5 n3 p+ _
economic fundamentals, an increase in available inventory and strong consumer
+ P& P; i# v" O2 K$ ^! Xconfidence. While the pace of price appreciation in Ontario leveled off1 S! ^3 f2 Q" g$ _
slightly, the province's real estate market remains poised for modest growth.# Y+ I! |+ \3 i: _' \/ G a
In Atlantic Canada, new housing and condominium construction offered buyers7 m# f2 l- M! W! _0 W8 _. t2 w( e
greater selection at more competitive prices, resulting in a slower rate of/ c( S! R) v1 c5 d+ _6 _( e6 b
price appreciation when compared with 2005.# P/ {& n9 J" \0 k0 t
/ v' I- q6 }7 X8 x While the pace of growth in Canada has slowed, the domestic housing
2 u$ E- m3 N( R: m# ]9 {4 nmarket is expected to outperform the American market. The economic and1 q1 @: | [" |2 p
financial fundamentals driving the residential real estate sector in Canada
8 m: S' f8 K$ r2 N; bare markedly different than those found in the United States.5 F/ Z$ [; M) g$ \& P- j. H! Z
- v& r6 K. E! W6 B( i Added Soper: "Canada's housing market is likely to outperform the" H3 \9 J0 P* S/ x) } |
American market through 2007. A number of factors are working in Canada's
) t5 E' X w& G0 L. ~$ Bfavour, including healthy personal and governmental debt levels, the
0 q* r3 e, l) f4 p; arelatively modest rise in interest rates in our country, and general
6 \6 x4 l( i3 e$ H# B' v) Raffordability in our major cities. In addition, Americans are now seeing the- u& N. i6 v A Z7 o
downside of a tax system that encourages maximum homeowner leverage, and7 @! o% O; B) O. o" M7 K, o2 e
aggressive financial products such as zero- and negative-amortization
4 L. J, ?+ ~5 d. F0 g4 s2 M4 c4 jmortgages that work only in a high price growth environment."/ s4 [8 K; M2 i [
% r- f; G4 |% C! X <<$ `) @8 {5 M9 r+ |7 `
REGIONAL SUMMARIES
* i" l: K7 @: e5 A >>. V3 S# P3 w$ Q6 Z8 a" Q
8 M( y( t$ L3 [' R& r
Balanced conditions continued to characterize the housing market in
) g( ?& `/ l' F+ [& [' lHalifax, as significantly higher inventory levels helped to moderate the rate
% s5 W( d4 T6 dof price appreciation. Buyers were increasingly choosy, taking more time
3 Y5 G( Y( j, @! [looking for newer, low-maintenance properties that were not in need of
, @8 J3 {' k8 H& l" @0 wrenovations.3 H& V! e2 y J$ s1 ^4 ^! ~
8 u7 B, f+ E* D1 |9 A) x3 X The housing market in Moncton remained healthy and strong as a slight
7 w) k4 E, u" v. ~5 p% b* Rincrease in inventory helped to moderate the rate of price appreciation* T# k6 L# P. r# c. I, N
compared to the same period in 2005. Activity was brisk throughout August and
' q. t' x2 e5 |* h& NSeptember and is expected to remain this way through the fourth quarter.& B! Z j% n T9 @2 M0 Z2 S
& j$ e2 X% }2 {
The housing market in Saint John underwent its traditional summer
5 B% r" M" O ?% Q+ P& E- {2 oslowdown in the third quarter, with activity picking up towards the end of the
4 g; z/ f1 L t) E$ ~quarter. The local economy continued to thrive, as construction on a new
$ Y _9 n3 u7 q" @* a600,000 square-foot shopping area has begun, bringing several new box stores$ u( d7 R9 p1 O( w8 b1 O
to the area. Buyers have begun seeking less expensive fixtures for their homes" Z1 ~& |0 N3 Z* P
and are instead opting for more affordable housing options.
! O8 L0 U, ` s$ B- C
: p0 p1 r1 z$ u* i6 S In Charlottetown, the housing market started to move towards balanced
; O7 v/ Z% X! Q! s+ X7 s% n7 Nconditions, as some sellers had to begin to lower the asking prices on their6 n, W D$ @0 a& W, H, E1 W
homes to make them more competitive. Activity from out-of-town and US buyers
8 z5 o% z0 Y& J$ R5 \, `/ pwas down slightly compared to 2005, likely attributable to the strong Canadian6 t- p1 Z0 N2 B% V6 Y( o
dollar. Inventory levels began to creep up in the third quarter, providing
1 U" G1 B4 q- b! ]. P! Jbuyers with more options when looking for a home.* r' B: H0 c0 L6 Y |6 x
$ H) l A6 K/ \5 i8 u! d; A9 l
Activity in St. John's slowed slightly in the third quarter, particularly
% Z! R/ w6 R% a7 aamong higher-priced properties, where there was a slight over-supply of homes Y/ _' v1 l2 z( X. ?" S
priced over $200,000. Listing periods have increased when compared with 2005,5 C$ f, z" X6 }) k! p' ~# ~- W5 O: X
as some of the pent-up demand that had characterized the market over the last% K# Q* U' W4 f# c
few years has been satisfied, resulting in more normal, balanced conditions.3 `2 O: i5 J: u8 y ^9 k" X3 N ?
6 J d# ?! @! y% A
Montreal's housing market recorded modest increases in average house
+ K3 k) z7 _. m: E# Bprices, due to a slight seasonal slowdown in the third quarter as inventory
1 X$ x! Y3 s1 n, }levels rose. Part of this can be attributed to the fact that many renting
( Y9 n q5 f! ffirst-time buyers were motivated to close on the purchase of a home by July 1,) Q, h; }* D/ x
when rental leases expire in Quebec. Once this date has passed some of the( o2 ?, G+ e- r5 t. Q0 j' C: u
pressure is taken off the market, allowing buyers to visit more homes before! m+ r1 u' y* V* G/ S
making a purchase.
3 i0 z* e) ] c! g _6 u6 w' U! i4 x0 L l% q3 h4 k; _! }
Ottawa held its position as one of the country's most stable housing
/ ?8 ], W, [! n: Y) i1 O5 jmarkets in the third quarter, reinforced by a vibrant local economy and strong t) r& ^# ~* G, I9 M
confidence, resulting in modest increases in average house prices. The city
" z6 U' G) W2 p2 Lcentre remained a bright spot in Ottawa, with homes in this area attracting) |$ l0 r# Y( L3 G
attention due to their convenient location and proximity to downtown% P f) M; G1 x% A( H, X+ |) i3 }
amenities.
5 K7 {9 |" q' x/ g# y4 h9 N. [ t
$ j4 _' F7 w9 X2 q( u. M, B1 K! ~ The housing market in Toronto sustained healthy activity levels
5 K6 u/ @3 c" A) O. A+ E0 J' Pthroughout the third quarter, as a strong economy helped to maintain demand3 K6 T, p0 Y* l3 l4 A" y: I& C3 G
across the city, causing average house prices to rise moderately. Toronto has
$ s" b8 z1 V9 H+ R' i* xcontinued to experience modest growth in average house prices, and has been
P7 ^. \" f0 ~) s/ U& {driven primarily by purchasers who are buying homes as their principle1 I; x* b; q4 b0 O5 K. L
residence, rather than for investment.5 D0 j/ ^, A' X$ p9 _
0 ]( w$ ?9 r1 G9 \ The vibrant Winnipeg housing market continued to show its strength as
8 y8 F) w9 z4 ]$ khouse prices rose during the third quarter. The booming local economy resulted' G) W1 {) B n+ K8 l) E4 d" s' x
in a historically low unemployment rate, helping to bolster consumer
1 l* l2 V( ^% A! K: {% t/ Z; m W; W3 }confidence and Winnipeg's ranking as the city with the lowest capitalization; T6 D. o/ p( w8 C) o
rate among the country's larger cities - helped to encourage buyers to enter! g7 V# b1 q7 ~/ P: @& J
the market.
1 w% ~0 I4 b' S ~( ]/ C# T4 S% K7 [1 L; T2 z( g% o. u; o$ k
In Regina, the market experienced a slight seasonal slowdown through% v0 g0 n0 E$ _
July, as there were fewer purchasers in the market due to summer vacations. In; B/ s8 L8 |' D n2 ]' y+ M4 O
August, activity resumed to the busy pace previously seen in the spring' l+ V1 J% A7 W' Z3 a. w
months, as the influx of purchasers made it more difficult to find a home due9 A; [' o- r3 h3 r1 V; {2 i) n0 q
to the shortage of available inventory.
' F Y1 o/ [( p( P: k. F
, D3 M* M, [5 t9 P& c2 `. E Activity in Saskatoon remained brisk as the market maintained its
1 P4 K, l- [) n& e8 k/ [% f8 a- e+ P7 bmomentum from the busy spring sales period. The economy in Saskatoon remains4 x* ~( h* e0 t: t) }2 K2 o
vibrant, as employment opportunities are abundant with many businesses5 ~& G$ u6 C& y/ f3 F- @, A
struggling to make hires and having to recruit outside the province.
1 a! x( O6 P+ z8 E5 ~ S+ ~# h7 w+ _; @ Y" V
Calgary's housing market recorded blazing average house price increases
4 A1 i7 J. |! p0 fin the third quarter, in all surveyed categories. The burgeoning economy, low& q! B, ]5 _5 Q- W" c' w
unemployment rates and low inventory levels remained the leading factors that. d- \: x7 H8 C# M
pressured Calgary's house prices upwards. However, regardless of the soaring
0 i* X* Q1 m/ |; Hprices that characterized the market - even during the typically slower summer
9 d7 n4 w) M8 X# {9 G1 Bseason - it is expected that activity will become slightly more balanced, as
1 c% a% D/ Z/ M% }! V% G; t/ j: ~buyers are becoming more reluctant to participate in the frenetic activity.7 Z- F6 Q- W6 S' W* k! X/ s& A
, a' O9 Q$ Y, b Edmonton's booming local economy continued to thrive in the third quarter. k- O @8 @$ @7 s5 p* t: D- p0 U q2 M
as activity in the oil sands north of the city continued to flourish. Edmonton
& I8 H: C! s- Vremained the hub of activity for those coming to work in the oil industry,
! D" L4 f4 A* ]4 q- emaintaining tight inventory levels across the city, resulting in prices: A6 {& e% H% N
increasing at record levels. However, as inventory levels continued to improve8 B, `2 S# Z# F9 v' p! o: @
in the third quarter the rate of price appreciation should moderate slightly; V( |! b8 [8 N2 E- B3 p* |" u# L9 {
towards the end of 2006. ' t, [6 J1 y# w/ t2 A# n
( X0 t* i _. y4 I: n: e5 d' E
While Vancouver has seen a slight reprieve from the severe shortage of
1 c+ A- i3 `' n8 ]5 Finventory that had previously characterized the market, supply is still unable
" r( ~ j" w8 l( W8 d- vto meet demand, driving house prices upwards. Vancouver has a very diverse
' M( ^* ?' F; F+ e+ K. Fgroup of active buyers - from first-time home buyers to baby-boomers to
# U' @; E8 \" I Q/ gforeign investors - all of whom fuel the demand for houses, placing added. [! y4 E& f/ R, O
pressure on tight inventory levels.* _: A: r, a3 K) p# {
& Z1 _4 I3 C5 ^ Victoria's market is vibrant and supported by strong economic" D! y7 z. _* g8 {7 y% C T2 W4 `
fundamentals, fuelled by a booming tech sector and a migration of young people
( h' r/ h) c" X; ainto the city that has continued to support the area's house price increases;8 J4 A# T, L* _- c
while increased inventory levels have afforded buyers more time when searching
, n2 B% D' N0 ]% H" [for a home, helping to normalize the market's pace.
W/ q) P0 E, i. \# \
" F1 ^# V+ t% t8 ~$ b8 Q1 U <<
# V/ q% O* d6 |. C x6 T Survey of Canadian Average House Prices in the Third Quarter 2006) A7 r% V3 y$ x+ r( f
( V8 M ^1 M3 s0 A; Q' J& f0 K -------------------------------------------------------------------------2 U2 Y( _3 P9 h7 f6 Z% O
Detached Bungalows Standard Two Storey
* k2 c. f! H3 Y -------------------------------------------------------------------------# f) g0 f8 @% J
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
( m; g1 F2 C% |/ F5 R) ~' E Market Average Average % Change Average Average# E$ j- B; {! W1 s5 c+ T
-------------------------------------------------------------------------9 B0 U1 p* R# A+ v- x
Halifax 186,333 173,333 7.5% 198,667 199,000. y" N& j! ?) _8 }) L, F
-------------------------------------------------------------------------, O/ t; R8 u" k! P- D
Charlottetown 145,000 141,000 2.8% 175,000 170,000; b3 l2 L4 I) F( L
-------------------------------------------------------------------------
" I5 v8 }8 }5 D9 {% q8 b Moncton 135,000 127,000 6.3% 129,000 123,000. E* N9 x! e. |# N( ~% D$ l' N2 F
-------------------------------------------------------------------------. z: r: j* n; I/ z8 K
Saint John 141,200 142,900 -1.2% - -
1 J0 Q) U# m6 a; V -------------------------------------------------------------------------' C: m) r5 @* y6 B
St. John's 143,667 142,667 0.7% 200,667 202,3334 q( h4 t7 ?1 [
-------------------------------------------------------------------------" E" k6 S0 n' R3 T& s
Atlantic 150,240 145,380 3.3% 175,833 173,583: J `5 ^# b! N5 L
-------------------------------------------------------------------------
0 L/ `' @: e: Y8 p& Z Montreal 213,691 203,500 5.0% 321,141 316,185
) H) U0 V; x& [, q -------------------------------------------------------------------------, A& n3 q( i; Q6 N
Ottawa 290,083 278,417 4.2% 285,667 273,250/ y* f* c5 Z% @8 U K2 A
-------------------------------------------------------------------------; n6 e5 Q! A. e' u1 T( ] }
Toronto 373,368 355,882 4.9% 481,523 474,766
; ]7 l+ X2 L1 ]3 r8 h" K -------------------------------------------------------------------------
0 i7 B' s1 Z3 d- r3 g Winnipeg 181,579 159,860 13.6% 202,337 180,707$ l" l# r j, Q% u2 S! }. G- T ~
-------------------------------------------------------------------------
6 {# h" b3 m- b. `3 P6 F$ q Saskatchewan 170,667 156,083 9.3% 182,600 166,500
: T" f) d# z! a6 S4 c' t -------------------------------------------------------------------------
/ D1 r1 p) T, u, `& r2 r Calgary 395,067 252,411 56.5% 405,778 264,389
$ ^* a0 o0 | T2 c% ?7 _ -------------------------------------------------------------------------
3 Q) I% b/ X; a2 _- z Edmonton 286,857 194,857 47.2% 316,429 206,7141 F0 z z* Z6 D. e
-------------------------------------------------------------------------% z, A% B% n6 f/ f
Vancouver 704,250 601,000 17.2% 794,000 697,500
" }) R% C2 J$ j/ F -------------------------------------------------------------------------6 K4 O; K1 d8 ^* A: T1 h
Victoria 375,000 348,000 7.8% 403,000 391,0008 A1 ^5 `7 D& H. ~; v [
-------------------------------------------------------------------------# C! f2 d% U2 ~% l; b' V
National 300,365 258,202 16.3% 365,380 322,860
$ r: o# `2 y# k; ^2 k -------------------------------------------------------------------------
1 W% a+ `9 K) _, S# y( O* f% o* q* W) k0 _
-------------------------------------------------------------
1 b) R; k( p/ X* F) }% {( J Standard Condominium
+ p0 z% ~; ?+ V1 o' l% l -------------------------------------------------------------( u/ p1 o R! ]( v6 [6 P! E
2-Storey 2006 Q3 2005 Q3 Condo
, X- f; S5 W1 e, G Market % Change Average Average % Change
% W! p+ z7 u/ Y& G ------------------------------------------------------------- W" C2 n9 s6 @# N6 c$ [4 b
Halifax -0.2% 142,000 103,000 37.9%
( i1 }" ~- m# U/ X -------------------------------------------------------------
Y0 t) [- r) h, k A2 d Charlottetown 2.9% 98,000 98,000 0.0%
8 A7 p1 E5 b# ?5 w$ B1 L0 M -------------------------------------------------------------
. M7 V$ y* f) ?+ ~( L Moncton 4.9% - - N/A/ C/ q- m1 r1 e8 s
-------------------------------------------------------------
0 v3 W9 [! H) r6 D2 g; f9 [1 E. P Saint John N/A - - N/A
, p% K+ W. U1 { m2 S, ~# a, X -------------------------------------------------------------
% @5 F- f4 ~+ I$ e$ m St. John's -0.8% 146,333 145,667 0.5%9 u% y1 r7 X4 Z( Z0 \6 x; ~
-------------------------------------------------------------
" ~1 v0 B) t$ j5 N! E. U# M Atlantic 1.3% 128,778 115,556 11.4%! t9 G* q1 D0 Z! f$ U" I6 q
-------------------------------------------------------------3 Q @! Q- m. G. W* p
Montreal 1.6% 193,190 188,016 2.8%; |. J) O3 \( A" S* V
-------------------------------------------------------------6 [- p/ O* t e
Ottawa 4.5% 181,083 172,250 5.1%
p& \' j( U- ^4 m -------------------------------------------------------------
7 D9 b& m5 ]4 N6 B8 _ A* J8 e Toronto 1.4% 252,088 242,918 3.8%
& _" F, [- I& y A0 P -------------------------------------------------------------
6 }+ c% _% I" p( b, N Winnipeg 12.0% 105,648 96,008 10.0%8 G4 i' ~8 l$ l* j
-------------------------------------------------------------/ S. Q% D) f7 B* ^' }5 a# @* C' j
Saskatchewan 9.7% 106,250 101,000 5.2%
7 o4 Z, c% ~( F9 _: \: i; c4 c& o -------------------------------------------------------------
( N: O' g; l7 d6 Y& g Calgary 53.5% 245,844 153,867 59.8%4 |8 n4 F9 {1 V0 _/ o
-------------------------------------------------------------! G+ v. h% s# y" p" I; s
Edmonton 53.1% 200,433 131,500 52.4%0 o# u; I6 o' g# e8 b" l
-------------------------------------------------------------
+ g/ E' m4 B$ H9 y4 S Vancouver 13.8% 366,250 323,250 13.3%
$ M% p' ~: c! R- x! @% u -------------------------------------------------------------
* h+ W9 M X5 ?3 v+ w* p( z/ C3 e Victoria 3.1% 229,000 220,000 4.1%& Y0 J+ V9 S2 [# h( H: z
-------------------------------------------------------------$ q' b+ q, A1 R) A; R) x
National 13.2% 211,562 185,296 14.2%
2 X+ Q$ L) ~9 R" [0 s; V -------------------------------------------------------------
' Z" R5 s% W' w% c' F! m >>
0 T4 q% c0 _1 |1 }* [: J# b! ?& N& n" f+ ?' x; q4 l8 I& h7 M$ ]+ G3 W
Average house prices are based on an average of all sub-markets examined7 l& v0 f, v0 `2 U& R7 v
in the area, except for the smaller markets of Charlottetown, Moncton, Saint$ D( A+ Z, u; E f( _, N
John and Victoria.2 D" X, j G7 q6 U' o
% g' P# A+ k. t* o
The Royal LePage Survey of Canadian House Prices is the largest, most
3 ~, s4 u' w, K$ R. V5 Ecomprehensive study of its kind in Canada, with information on seven types of
7 K$ ]- q$ `! uhousing in over 250 neighbourhoods from coast to coast. This release
5 S" K7 u; b2 h+ kreferences an abbreviated version of the survey, which highlights house price. S }) {; A2 k. z. ~( R
trends for the three most common types of housing in Canada in 80 communities% @, |) o9 I: X; d5 E8 Q+ k2 j
across the country. A complete database of past and present surveys is( S4 A* v/ |& o/ ^2 q9 @8 P
available on the Royal LePage Web site at www.royallepage.ca, and current
2 d! C6 K$ ^1 nfigures will be updated following the end of the third quarter. A printable
" u1 A' `0 I/ M: pversion of the third quarter 2006 survey will be available online on% v ^6 o9 p6 M1 Y9 c
November 15, 2006.: E9 G {8 Z4 N& K6 m
Housing values in the Royal LePage Survey are Royal LePage opinions of
4 `; c5 \1 h) v" K9 O* w$ n F) s! Ffair market value in each location, based on local data and market knowledge
3 k' T' q2 M. u8 A5 Cprovided by Royal LePage residential real estate experts. Historical data is* @, O& _, }9 j# q9 G
available for some areas back to the early 1970s. |
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