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Canada's housing market both vigorous and stable
' D" t! a: P# E+ D( w0 q; s6 C2 ~& p
. e+ ~2 I' J5 m& Y8 j- Country's market poised to show growth throughout 2006 -
/ J$ [* h& W6 Y$ |7 r5 }2 T: M* W7 P% n: @0 w% J
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
( ]5 ?8 R& O) d1 Xexhibited moderate price increases and stable unit sales during the third0 ?. G. B9 @" l. w' x0 y
quarter. Wide regional variances continued to be the dominant characteristic
) p) w( ^# C% e# m% lin the market, exemplified by frenzied levels of activity and double digit2 ^4 k: o! Q M& }9 d' E' t
price gains observed in the energy and commodity rich Western provinces, and1 ^; s; C! {8 R+ G( g6 r% y. f
more reasonable sales volumes and moderate price appreciation in Ontario,
}# C+ K9 q5 Y; S$ T j3 |0 mQuebec and Atlantic Canada, according to a report released today by Royal
8 {2 _" r, U3 y4 yLePage Real Estate Services.+ G9 f( [: F. p0 k, r
" L& g5 D7 i! p0 }0 ?& @: q5 x
Nationally, market trends established through the first three quarters
! @7 | l* a/ ]+ y+ |5 zare forecast to continue for the remainder of the year. Robust economic
) v3 j$ t: E2 B: ^; Q3 Hconditions, low unemployment rates, modestly growing salaries and wages, and
/ i7 f& D- O, q0 m- b8 usound consumer confidence contributed to the overall strength of the: L$ |1 a/ j' X- g. e1 i
residential real estate sector.' o, [. S! e- [, x! I3 i
9 ^9 `6 L& i- h
Of the housing types surveyed, the highest average price appreciation
: F8 F6 b$ |9 i) z& b7 Uoccurred in detached bungalows, which rose to $300,365 (+16.3%)
% V% ?5 X" Y# c N# { d& Z! P: hyear-over-year, followed by standard condominiums, which rose to $211,562" z7 x0 f5 a, T! W# ] w
(+14.2%), and standard two-storey properties, which increased to $365,3802 X7 o- S4 p- S/ C
(+13.2%).4 b% a- x# m t+ T ]5 A
! J3 e8 {* b. D+ W "Canada's sturdy housing market continued to demonstrate steady growth" q+ {5 |! f( G: j8 r' E
during the third quarter. For all but the west, we have moved on from the
( B% r) x+ @; P5 _+ Y' w9 ^6 @frenzied expansion that characterized the first half of this decade, and are
( t2 I- L4 l$ U# s2 p* cpoised to show continued growth at a more moderate pace," said Phil Soper,. v0 P# C& ^1 \$ q2 {
president and chief executive officer, Royal LePage Real Estate Services.
+ G8 |' O* a6 m# V"Gone is the sellers' market that we have lived with for some years. We
( h6 a( r4 J2 W( V6 b; ^; cwelcome the more reliable conditions that are characteristic of a healthy5 E) G( e6 c3 N4 Q: |# t7 V
balanced market."
. ~( V3 a4 y' b' [+ t& Y
* }" i8 n) T7 d Despite the double-digit rise in average national house prices,2 h4 r: g4 ~2 x4 W
considerable regional variances were exhibited again this quarter. The shift5 I# R* `# o1 A( |4 c3 N% `
to balanced market conditions, which began in late 2005, has continued
: I, b# }- Y- t) |) @9 Xthroughout most of the Central and Eastern regions of the country. In the core
5 Y$ z+ l; |$ s8 P( j& t2 denergy producing western provinces, the combination of very high in-migration,
) c0 z$ M, `8 r* A hmanageable affordability, and a shortage of inventory has driven record2 |" n- h7 t* K9 [( o5 [, K. J
breaking price appreciations.: F& D; p* h. l8 {5 s
; E/ B2 M# c9 }) R+ ^% C Echoing the second quarter and supported by Alberta's rapidly expanding
; x/ \ A+ z6 o5 teconomy, Calgary and Edmonton led the charge of Canadian cities with the
9 w/ n% g: Z8 F) d, c A! @largest house price appreciation in all housing types surveyed.
4 Q+ n9 g2 w. w4 U6 o$ `2 ]+ Z: j# b# i$ J: D' v
In Ottawa and Toronto, growth remained steady, supported by solid& }# P3 A. L' F' |
economic fundamentals, an increase in available inventory and strong consumer: f7 {. \$ a3 K
confidence. While the pace of price appreciation in Ontario leveled off
/ I6 l* i' w6 F) O Xslightly, the province's real estate market remains poised for modest growth.
' Q/ F4 [- k6 Y5 e7 xIn Atlantic Canada, new housing and condominium construction offered buyers
+ D! A! _7 Y! K- ~- Rgreater selection at more competitive prices, resulting in a slower rate of
8 O7 r" y, T" B W& cprice appreciation when compared with 2005.
1 i, G9 i' s C. ^- L4 o, I9 |5 Q( \7 j% B6 ?8 W
While the pace of growth in Canada has slowed, the domestic housing
9 A: ^- {3 f1 z, Ymarket is expected to outperform the American market. The economic and; N7 u+ h; F- {& C& v( j8 f
financial fundamentals driving the residential real estate sector in Canada1 T( t" i/ E4 w. r
are markedly different than those found in the United States.
. i& v; e; ^; U5 D
5 @. `, w6 ]2 j% k3 ] Added Soper: "Canada's housing market is likely to outperform the9 U$ M+ G2 i$ `
American market through 2007. A number of factors are working in Canada's
& `2 R; p' N+ p. e7 C: x/ ufavour, including healthy personal and governmental debt levels, the6 e* ^+ _& d$ G0 Y9 N6 N8 w
relatively modest rise in interest rates in our country, and general( A& ^: V5 i% q. {1 T4 ?5 o
affordability in our major cities. In addition, Americans are now seeing the! }0 o4 G6 H9 [
downside of a tax system that encourages maximum homeowner leverage, and$ D+ q* C; h6 }) ^* M5 _
aggressive financial products such as zero- and negative-amortization+ {' a+ b$ ~) s( n
mortgages that work only in a high price growth environment." o* B* w e' S' [
9 P% |* n0 h+ z9 A; y <<
- K8 ]7 ]0 L- C. e REGIONAL SUMMARIES
9 ~1 n6 [- t2 y' k. Q >>: k7 }3 p0 e5 J1 {# K8 T! [2 M" N% l
+ ?$ f* u | ?, I
Balanced conditions continued to characterize the housing market in; O$ s3 \* h$ m/ s3 V/ z
Halifax, as significantly higher inventory levels helped to moderate the rate
+ h0 k* D& W \) ?9 W$ B) ]6 zof price appreciation. Buyers were increasingly choosy, taking more time
2 T; B; E. E u3 Xlooking for newer, low-maintenance properties that were not in need of
/ n( y- ^$ ` k. erenovations.
8 r: @0 L& O ]9 n) |- X8 P
' m w. t( d6 P" n6 p The housing market in Moncton remained healthy and strong as a slight
( k& m- N; L* H# N. Rincrease in inventory helped to moderate the rate of price appreciation
! |( U* n% N2 @6 M$ a4 bcompared to the same period in 2005. Activity was brisk throughout August and
2 L: h! ~9 r, @# U8 TSeptember and is expected to remain this way through the fourth quarter.) v" l7 `" f+ a" ?0 l+ b: a7 Y* d4 Y
" t9 u4 f# G5 L S) u The housing market in Saint John underwent its traditional summer
# p% S* s6 i; y3 G6 B0 [/ ~: kslowdown in the third quarter, with activity picking up towards the end of the: t% X R) {$ V( J& ?+ @6 B4 T
quarter. The local economy continued to thrive, as construction on a new5 b8 E" \" z7 q3 E
600,000 square-foot shopping area has begun, bringing several new box stores0 o i9 _) w6 J2 v
to the area. Buyers have begun seeking less expensive fixtures for their homes- w C) a- s* u/ j; y; G) D
and are instead opting for more affordable housing options.
5 f; k/ j+ v, P0 J! v* v) F; x9 {/ K: |6 h* K3 t. l6 m
In Charlottetown, the housing market started to move towards balanced/ f+ w" X8 a; |- u$ N
conditions, as some sellers had to begin to lower the asking prices on their
% K1 L' g# R8 ^- W6 W3 Hhomes to make them more competitive. Activity from out-of-town and US buyers4 _2 c5 Z: M. E1 x3 z
was down slightly compared to 2005, likely attributable to the strong Canadian
; u7 D7 k+ V) z2 fdollar. Inventory levels began to creep up in the third quarter, providing
8 v+ h$ O( Q3 u4 `1 P- A$ a/ k" ^+ dbuyers with more options when looking for a home.
% C9 N- n7 b L G: w2 t3 o( t* z% k
Activity in St. John's slowed slightly in the third quarter, particularly
+ V7 m2 v& B* l4 eamong higher-priced properties, where there was a slight over-supply of homes
) O6 D3 p" Z/ z3 Z; K- `priced over $200,000. Listing periods have increased when compared with 2005,
h" q$ w& y% sas some of the pent-up demand that had characterized the market over the last& G) W0 P: B' s0 y0 b H
few years has been satisfied, resulting in more normal, balanced conditions.# N/ I7 X3 S; f2 I! R, W1 B
' N. d2 z1 x% f/ s8 O
Montreal's housing market recorded modest increases in average house
; H1 r- `3 k/ v5 r7 jprices, due to a slight seasonal slowdown in the third quarter as inventory
5 [6 t% _( h, ]. M2 x/ [levels rose. Part of this can be attributed to the fact that many renting5 A: d# G* ^5 k6 A1 |
first-time buyers were motivated to close on the purchase of a home by July 1,; D9 t; D% e. ~1 n9 e+ _
when rental leases expire in Quebec. Once this date has passed some of the
4 i1 g6 |" t- Epressure is taken off the market, allowing buyers to visit more homes before5 J+ A# U4 B& J g, a( S
making a purchase.
- n( A \) E- b# l! l# \: Y" Q' K: |( [; J' h$ `0 z
Ottawa held its position as one of the country's most stable housing K3 q$ j. e' I
markets in the third quarter, reinforced by a vibrant local economy and strong
+ e, @& Z) A9 _- ]" U. r8 Jconfidence, resulting in modest increases in average house prices. The city ^; z5 q& D% f1 z4 E3 U& V2 |1 R# j2 K
centre remained a bright spot in Ottawa, with homes in this area attracting
) e+ D/ k- J7 z$ k9 qattention due to their convenient location and proximity to downtown
7 I% S( `, C" M" a2 Zamenities./ D$ K# S- P4 C* d/ B6 ^
) M4 v- i1 X" `2 w% v The housing market in Toronto sustained healthy activity levels' M, d2 ?" c& P
throughout the third quarter, as a strong economy helped to maintain demand
2 K' n+ R$ [4 m3 o- T- qacross the city, causing average house prices to rise moderately. Toronto has
( z( |% O: f5 Wcontinued to experience modest growth in average house prices, and has been
' p9 G3 i; ^8 w$ \driven primarily by purchasers who are buying homes as their principle9 ~$ q1 ^3 l6 R( N: l
residence, rather than for investment.
7 M& {: s. c6 L. c( p3 I. s
) O3 Z! {3 D# u5 v The vibrant Winnipeg housing market continued to show its strength as
! S7 k+ a$ M& ?0 r! P: H C) P: ehouse prices rose during the third quarter. The booming local economy resulted
( F# ~# _8 d2 X' l xin a historically low unemployment rate, helping to bolster consumer) q: w- y& X. U1 e) Q6 m1 m/ E. {
confidence and Winnipeg's ranking as the city with the lowest capitalization" b" o# G, H; |
rate among the country's larger cities - helped to encourage buyers to enter
0 B- V- Q$ G" o! P# x" c1 Cthe market.
8 p1 u! m2 P; w+ p: Y
3 e7 N- d+ Z: a, G In Regina, the market experienced a slight seasonal slowdown through
' `3 r+ v* _: K1 p8 eJuly, as there were fewer purchasers in the market due to summer vacations. In
& e) n' H6 ?5 K( z1 J Y# a8 _6 l& XAugust, activity resumed to the busy pace previously seen in the spring" `; O0 t5 K8 h
months, as the influx of purchasers made it more difficult to find a home due
w2 |2 q8 v: vto the shortage of available inventory.
}3 w. A' G: l$ |1 H1 n1 ~7 p6 Y$ l; I( f' ]% [- {" Z5 d
Activity in Saskatoon remained brisk as the market maintained its
: b: |) p7 d( ]% w1 h. q8 gmomentum from the busy spring sales period. The economy in Saskatoon remains
, V$ `5 g. W! R% q* Y2 pvibrant, as employment opportunities are abundant with many businesses6 o# e( B! b8 Z/ p6 H
struggling to make hires and having to recruit outside the province.4 o& c! T5 f; j0 u$ r
3 i" j( s& ]# D8 l Calgary's housing market recorded blazing average house price increases
7 ~5 c- o: {- n9 i# f: xin the third quarter, in all surveyed categories. The burgeoning economy, low2 f$ {/ p7 n7 v8 j: B
unemployment rates and low inventory levels remained the leading factors that. `; e& t# G) k% z& D
pressured Calgary's house prices upwards. However, regardless of the soaring' b9 ]( {4 ~& T) S( h
prices that characterized the market - even during the typically slower summer& a% c/ c i2 }5 Y# g, W: m
season - it is expected that activity will become slightly more balanced, as
" q9 B/ v3 s; |# m2 I! a2 Qbuyers are becoming more reluctant to participate in the frenetic activity.
% |) Q; [; Z4 p3 f! Q5 a. |" t* Z6 l. t5 Q( r B4 J
Edmonton's booming local economy continued to thrive in the third quarter
5 I" w( t" @) O( B+ J' Q: ?as activity in the oil sands north of the city continued to flourish. Edmonton
6 n* a+ @7 Y* J% i) ?, f" Iremained the hub of activity for those coming to work in the oil industry,6 w/ O( u; {5 Q" W. T/ |! `3 w7 V
maintaining tight inventory levels across the city, resulting in prices- J: t3 ?, S6 u- Q* F
increasing at record levels. However, as inventory levels continued to improve
- Z, H+ v% W4 N# t1 Iin the third quarter the rate of price appreciation should moderate slightly
& |, O9 a l. y# dtowards the end of 2006. " E5 O/ F. I: U! b) @2 i ?
5 e: f3 Q0 t( ^. n% d* VWhile Vancouver has seen a slight reprieve from the severe shortage of& [/ X2 y. J. u- o" R& Z
inventory that had previously characterized the market, supply is still unable+ [& q# {/ Q+ \5 E/ v
to meet demand, driving house prices upwards. Vancouver has a very diverse0 U& a& o! n7 | M2 [: Z$ D
group of active buyers - from first-time home buyers to baby-boomers to+ V$ \8 w$ J0 Z* V# E
foreign investors - all of whom fuel the demand for houses, placing added( y2 `+ L3 J4 ]/ }: F2 g. n
pressure on tight inventory levels.1 ~) M- Z: } |- c8 ?
x" C# B7 H5 W1 B5 I
Victoria's market is vibrant and supported by strong economic
( C. c5 A2 R% Z6 k8 U. m8 V0 p, |fundamentals, fuelled by a booming tech sector and a migration of young people
% v/ C- _& g0 j, o% Dinto the city that has continued to support the area's house price increases;: {4 \7 f5 W0 G7 g |$ L2 n
while increased inventory levels have afforded buyers more time when searching
4 ]. y4 |2 \: V" Sfor a home, helping to normalize the market's pace.
7 {' ]- v# f2 u, B7 B
( y+ C$ k9 t( e* H$ L* A3 j <</ j3 o9 U* Y2 K* P: K1 } V7 ?2 B9 U
Survey of Canadian Average House Prices in the Third Quarter 2006( W5 ?0 ^2 p! M
' D( q7 N5 K" i; E r
-------------------------------------------------------------------------
, U$ G! A2 f- {" ~ Detached Bungalows Standard Two Storey
/ a: H$ I! ~+ P/ Z* d/ | -------------------------------------------------------------------------
- W' `" h7 j3 i' i 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
# |% T' K' g* I* w: s5 l* O5 K# z X Market Average Average % Change Average Average
- b7 C& Q9 t! S6 n" l6 U. T -------------------------------------------------------------------------, D$ @' j, t: y6 r9 S
Halifax 186,333 173,333 7.5% 198,667 199,0001 n! K% s, H: `2 v
-------------------------------------------------------------------------
0 T! u' C0 ]* h& Z( z3 s Charlottetown 145,000 141,000 2.8% 175,000 170,000
% A- P) u* ~2 h J -------------------------------------------------------------------------
& y7 v, _ Y0 q1 B8 P Moncton 135,000 127,000 6.3% 129,000 123,000! A2 g9 z8 k7 x) f: `/ U1 U+ H
-------------------------------------------------------------------------
% Z: K2 r2 O# @' Z( b Saint John 141,200 142,900 -1.2% - -5 I, E3 U" h* j# I
-------------------------------------------------------------------------
! J% t+ h; e5 S6 A t) G St. John's 143,667 142,667 0.7% 200,667 202,333
5 y$ C7 {! q, C. t* ~ -------------------------------------------------------------------------
7 X, B3 e. `3 F6 p* N9 y Atlantic 150,240 145,380 3.3% 175,833 173,583
r0 K6 G' x/ Z% Z9 P4 q -------------------------------------------------------------------------: G! p' l- b+ V& o5 c
Montreal 213,691 203,500 5.0% 321,141 316,185; p6 c% {6 M, t
-------------------------------------------------------------------------
; G) y5 `# Q- a1 ?+ x Ottawa 290,083 278,417 4.2% 285,667 273,250/ C. s, M1 V$ G: `9 f' k
-------------------------------------------------------------------------
6 `2 L" T( f: O% y# }6 _ Toronto 373,368 355,882 4.9% 481,523 474,766 x( z( ^$ K0 r, s5 [
-------------------------------------------------------------------------2 ?+ c8 B0 k0 t/ O& m
Winnipeg 181,579 159,860 13.6% 202,337 180,707# n( \+ w3 G" i2 l8 ]
-------------------------------------------------------------------------
+ z- ~5 l) }! c Saskatchewan 170,667 156,083 9.3% 182,600 166,500
3 D- _( [; M) C7 I, ^- X7 K9 i" v -------------------------------------------------------------------------" T; h+ o" m+ e3 R R5 I% X
Calgary 395,067 252,411 56.5% 405,778 264,389# S, c* R0 H' s
-------------------------------------------------------------------------2 ~# i7 D+ `' ^6 p: Q; r. k
Edmonton 286,857 194,857 47.2% 316,429 206,714/ S# z+ c0 ~7 M. M7 M$ h5 N9 f! M% {" F
-------------------------------------------------------------------------
9 z( V) u) ^, G; h Vancouver 704,250 601,000 17.2% 794,000 697,500' y- d S# G6 X( D
-------------------------------------------------------------------------( O, P* r6 p/ s9 Z
Victoria 375,000 348,000 7.8% 403,000 391,000
1 Z! ?2 [, V; V0 i9 z' W -------------------------------------------------------------------------) c7 i2 W% F9 E. y6 R) Q' R
National 300,365 258,202 16.3% 365,380 322,860
9 G/ A0 W% b9 w4 E4 E* W& r -------------------------------------------------------------------------
0 D+ z2 n/ }+ n8 r3 `- n4 Q/ W+ O' S9 X x
-------------------------------------------------------------
* z4 L, x/ m4 C: z; p8 T Standard Condominium
8 R5 N5 u! ~ w( ]$ h -------------------------------------------------------------
- G) C6 ?- q6 A 2-Storey 2006 Q3 2005 Q3 Condo: l7 ]# D5 N/ s! e! Q
Market % Change Average Average % Change
$ e5 ~! R0 Z$ r# g8 F -------------------------------------------------------------
' E6 D. ]5 G: j, s( v9 u Halifax -0.2% 142,000 103,000 37.9%( m2 m. I9 k3 Q" T$ R7 I
-------------------------------------------------------------" h+ I, T% U6 V3 Z2 z0 c, ~
Charlottetown 2.9% 98,000 98,000 0.0%: a: m4 \6 `. ` }+ }6 }: E
-------------------------------------------------------------9 {0 w- J& g- a" d/ b, T
Moncton 4.9% - - N/A
' ]; s' Y1 J* L1 O( c -------------------------------------------------------------
# d' p# w2 Y. q Saint John N/A - - N/A
3 q+ C+ @) X" p) ]# ?0 K7 _ -------------------------------------------------------------
) d I' n3 ^; i* D+ i3 f O n% E# c St. John's -0.8% 146,333 145,667 0.5%. C1 ^: T9 f3 d1 i3 r7 n; \( e4 g
-------------------------------------------------------------
+ T' g& F6 k0 F Atlantic 1.3% 128,778 115,556 11.4%! P0 w; F) E+ O8 Z* F; j& a
-------------------------------------------------------------0 N5 @4 B& _* b B; g# e/ x' u
Montreal 1.6% 193,190 188,016 2.8%
& B& F. i: ?! t4 n6 ~* w, P; v, Z -------------------------------------------------------------
% v& K; Y7 b- j9 W6 u, s) j2 P& Q Ottawa 4.5% 181,083 172,250 5.1%
8 i1 q) M0 C! C6 N0 F: ]" e, R# E -------------------------------------------------------------' i- c- T9 [ r6 B" \, }7 J
Toronto 1.4% 252,088 242,918 3.8%
* s& r8 p/ t9 a+ o$ C9 ~; ^6 x1 n -------------------------------------------------------------
6 H" M4 x/ n* c) E. [ Winnipeg 12.0% 105,648 96,008 10.0%( q" ` U* l" q# B, T
-------------------------------------------------------------
$ E( `* d8 g, k) A Saskatchewan 9.7% 106,250 101,000 5.2%, h! T7 F, J( N0 @2 u" [
-------------------------------------------------------------
+ H6 b% l e, n% L B4 u# }2 r Calgary 53.5% 245,844 153,867 59.8%- t& G# \+ ~3 g2 M' b
-------------------------------------------------------------" c' F; q0 c/ ], s! e
Edmonton 53.1% 200,433 131,500 52.4%
5 C( D# Z9 R' C -------------------------------------------------------------
0 f: }. m, h+ I+ W7 x! e Vancouver 13.8% 366,250 323,250 13.3%# @! i; ?0 }0 F* h4 s I
-------------------------------------------------------------
; ^" i$ p& V& S) l Victoria 3.1% 229,000 220,000 4.1%/ T9 L( S/ Y$ E; E: ? d( ?; f! ]1 d& |8 B
-------------------------------------------------------------
# v: p, @& e/ }+ P" c National 13.2% 211,562 185,296 14.2%
4 H3 M( N9 ]$ x' Y! w$ L -------------------------------------------------------------
" b% K& g3 W- t) `+ t5 K: | >>
3 {0 V, d" h/ F H- p# Z0 g; m" e1 t0 _9 f; q; g% a. m
Average house prices are based on an average of all sub-markets examined
/ a2 r6 N m9 _6 }9 [* ]4 ein the area, except for the smaller markets of Charlottetown, Moncton, Saint6 h+ Y d& D6 u/ |
John and Victoria.; |, K9 ~8 {4 }' v3 e& [( u' n6 c
3 W6 @$ g2 M- l8 j" p8 J The Royal LePage Survey of Canadian House Prices is the largest, most' u3 m% u% f" _ B
comprehensive study of its kind in Canada, with information on seven types of
9 @, i; P3 ~6 M" _& ?housing in over 250 neighbourhoods from coast to coast. This release, W# I6 P* W* o+ h
references an abbreviated version of the survey, which highlights house price
9 q0 p2 U8 X7 j& }/ d, y5 Mtrends for the three most common types of housing in Canada in 80 communities
( q. R$ ]) L# _( Qacross the country. A complete database of past and present surveys is+ r) k; C) [" o8 V& Y
available on the Royal LePage Web site at www.royallepage.ca, and current
" e% A1 W r# |! A. h9 ]9 W6 W1 Tfigures will be updated following the end of the third quarter. A printable# x3 [9 n1 L B6 o+ }+ |8 F L
version of the third quarter 2006 survey will be available online on
* j: I7 `3 { I# M" [- j9 D& M( \November 15, 2006.
- ~! r$ {( E5 S) X' x Housing values in the Royal LePage Survey are Royal LePage opinions of
7 j$ N9 j! U" P f0 dfair market value in each location, based on local data and market knowledge
3 q3 z$ z; {: @ _) f( D* H1 iprovided by Royal LePage residential real estate experts. Historical data is
/ \& L j3 M8 }1 Javailable for some areas back to the early 1970s. |
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