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Canada's housing market both vigorous and stable
. |; ]$ H6 u1 @' |2 D; E" n) |4 \% m# a6 x0 k% K A$ c: }. t
- Country's market poised to show growth throughout 2006 -) f. ~: K& Q0 R1 h) P3 H
% m+ k6 C' ^$ W
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market7 Z% l5 S. F2 `! T M9 J
exhibited moderate price increases and stable unit sales during the third
" @" p+ W: T. }6 fquarter. Wide regional variances continued to be the dominant characteristic
/ o0 H0 M d$ p6 U7 jin the market, exemplified by frenzied levels of activity and double digit: h( Y- K: Z9 f1 V6 x" U
price gains observed in the energy and commodity rich Western provinces, and
. Z* r' w) `1 E, x7 _, x2 jmore reasonable sales volumes and moderate price appreciation in Ontario,' q( Q c# C, t" ]5 A& h
Quebec and Atlantic Canada, according to a report released today by Royal
7 C' a4 j) z; y7 A3 F' G4 L6 \6 ?LePage Real Estate Services.4 B2 }0 t" c. \; A- O
4 `: q0 w; Q0 W6 t" ~
Nationally, market trends established through the first three quarters
- ^( ^% p* a& W- Iare forecast to continue for the remainder of the year. Robust economic
/ G( p9 ?2 P* ?conditions, low unemployment rates, modestly growing salaries and wages, and
8 k: |: C4 i, Y0 Csound consumer confidence contributed to the overall strength of the) k0 V. {- Q+ e
residential real estate sector.
+ E; [3 h7 u% y. x! t: l
9 o, Q+ b( F5 {! w* q. {2 ` Of the housing types surveyed, the highest average price appreciation
- p7 R) t. V' V7 f$ }occurred in detached bungalows, which rose to $300,365 (+16.3%)
/ {# s0 {7 O- t$ byear-over-year, followed by standard condominiums, which rose to $211,5626 U( N2 A" o( R" R( g
(+14.2%), and standard two-storey properties, which increased to $365,3806 I( ~. T5 Q. n; T7 K
(+13.2%).
2 a6 H$ ]2 P' J1 Z; z
6 ~9 Y! i, Y- K0 u4 \ "Canada's sturdy housing market continued to demonstrate steady growth3 |: p: _% e# p" P
during the third quarter. For all but the west, we have moved on from the h0 B9 g( [/ x' |' R( l7 R
frenzied expansion that characterized the first half of this decade, and are7 r! b {% v" q# @
poised to show continued growth at a more moderate pace," said Phil Soper,
5 w2 f7 S; y! ]# T2 C' y! Y* Npresident and chief executive officer, Royal LePage Real Estate Services.
. f$ Z' D2 o% s"Gone is the sellers' market that we have lived with for some years. We; P: \- _( ^7 t0 t; [- S
welcome the more reliable conditions that are characteristic of a healthy
( m: Y5 i& F& ^3 a5 O- Lbalanced market."% B: K5 X2 m/ h) \ I# U
; f3 X) ]" h" r& ]2 h6 v" I/ d- E" A/ w5 V
Despite the double-digit rise in average national house prices,
( L& h5 i- l* i# x8 jconsiderable regional variances were exhibited again this quarter. The shift1 `0 m) ^: W2 w; l4 Q4 A1 o
to balanced market conditions, which began in late 2005, has continued
) `7 d& `5 ~6 n% d# \! w6 Othroughout most of the Central and Eastern regions of the country. In the core) R& T% H i4 M" w& e# H7 P$ M
energy producing western provinces, the combination of very high in-migration,1 f# _( Q$ R( y0 j e( x. C
manageable affordability, and a shortage of inventory has driven record; U; s! ~9 |3 n0 m3 k
breaking price appreciations.
, }) G% Q5 O( s( y w* Q* X K' y. v1 ^2 u* Z; h
Echoing the second quarter and supported by Alberta's rapidly expanding( q1 `' `& V1 L# F: `8 I
economy, Calgary and Edmonton led the charge of Canadian cities with the
9 ~( {) X, Y: g p6 tlargest house price appreciation in all housing types surveyed.4 N$ T1 _: f0 ]* j( i
3 M- T- E7 U3 n# w7 n
In Ottawa and Toronto, growth remained steady, supported by solid8 [! l! B3 L2 F! P' M8 b
economic fundamentals, an increase in available inventory and strong consumer( X+ m- L( N0 c) C
confidence. While the pace of price appreciation in Ontario leveled off2 w. L/ I0 [, _* D
slightly, the province's real estate market remains poised for modest growth.$ j' w4 N H& H9 M, L+ [; M0 B
In Atlantic Canada, new housing and condominium construction offered buyers
4 y# T0 P3 `! ]/ k, k& S# U1 `greater selection at more competitive prices, resulting in a slower rate of
3 v, b/ ?( G. U9 ]/ fprice appreciation when compared with 2005.
" M+ |& ?6 S+ y% S2 s: U. x) `$ Y0 c5 c
While the pace of growth in Canada has slowed, the domestic housing
. x9 E2 m7 i& ^. c/ y/ ]market is expected to outperform the American market. The economic and5 J/ l( d4 ^3 b1 F) C: ^- Z6 R8 b
financial fundamentals driving the residential real estate sector in Canada
; s+ o0 u7 N0 z( s. e9 z. Qare markedly different than those found in the United States.
/ I! B. H% E$ K5 q
5 J6 F8 c; f& A) h8 x" O Added Soper: "Canada's housing market is likely to outperform the
* ] X& V, w- S1 v5 ~1 d# rAmerican market through 2007. A number of factors are working in Canada's6 q1 v" z# A* ~4 `
favour, including healthy personal and governmental debt levels, the, |2 t% K5 c$ i# ]$ S
relatively modest rise in interest rates in our country, and general j; M- `& ?, }8 c! A/ m# z) ^
affordability in our major cities. In addition, Americans are now seeing the: x) R. M T/ g$ r9 R T
downside of a tax system that encourages maximum homeowner leverage, and u& S4 o* _4 w
aggressive financial products such as zero- and negative-amortization
" F* D: O6 A% \, M2 T# Umortgages that work only in a high price growth environment."
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<<
$ a3 d$ y* Q- }8 E" S REGIONAL SUMMARIES
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% u/ E( k# g+ w4 q7 `' x& K8 R8 M! [" w0 B7 h' h5 _+ @
Balanced conditions continued to characterize the housing market in
, v& @6 z. f0 ^9 \% A: mHalifax, as significantly higher inventory levels helped to moderate the rate! e, j$ t" R/ e% t2 L# ^: |
of price appreciation. Buyers were increasingly choosy, taking more time4 p) S* n. f; G K4 y
looking for newer, low-maintenance properties that were not in need of
! H& |7 n% B8 {5 K5 l$ erenovations.
6 i* v/ \! s% q( l/ g6 n5 _' o
8 ^( s* B' [$ G8 v& b0 T The housing market in Moncton remained healthy and strong as a slight* b# [/ E- C8 A; v1 B
increase in inventory helped to moderate the rate of price appreciation3 v' S) m5 y+ h0 n
compared to the same period in 2005. Activity was brisk throughout August and& M% y$ E1 z0 B5 U- j4 _. [
September and is expected to remain this way through the fourth quarter.
) y- \, n0 M; _+ l% b1 _5 N' J* x; u: Z
The housing market in Saint John underwent its traditional summer
! |5 S. k7 h0 mslowdown in the third quarter, with activity picking up towards the end of the
4 |# [+ e0 U1 u2 iquarter. The local economy continued to thrive, as construction on a new
: @) z: O8 ?- _( D Y600,000 square-foot shopping area has begun, bringing several new box stores% [8 Z1 h) O5 s: K
to the area. Buyers have begun seeking less expensive fixtures for their homes
0 H4 `- o' E n) v; wand are instead opting for more affordable housing options.
. a; ~4 l5 y$ `0 b
; m8 @4 P: v0 X" v+ F In Charlottetown, the housing market started to move towards balanced
6 `3 m0 q0 @* Pconditions, as some sellers had to begin to lower the asking prices on their
: J& l0 k# q! A3 H4 h% v {7 y1 phomes to make them more competitive. Activity from out-of-town and US buyers
8 y% v" S" K: E/ D# X- Nwas down slightly compared to 2005, likely attributable to the strong Canadian
, t1 P3 Y/ t$ ?( H" gdollar. Inventory levels began to creep up in the third quarter, providing
" W1 |: K. U+ k% n9 |buyers with more options when looking for a home.
! U7 \7 _6 A% ~+ n& b% ]0 G* j8 U4 [5 C
Activity in St. John's slowed slightly in the third quarter, particularly
7 f0 t: |& K+ h; P/ hamong higher-priced properties, where there was a slight over-supply of homes
" p+ h8 b5 r# C; |1 rpriced over $200,000. Listing periods have increased when compared with 2005,
: ], B* E+ P/ G$ j/ \as some of the pent-up demand that had characterized the market over the last
1 G4 Y9 I) ^7 v- s- {few years has been satisfied, resulting in more normal, balanced conditions.
4 i5 e+ y, Y; x9 ^2 p: F; C/ ` I
Montreal's housing market recorded modest increases in average house1 } _+ K& }1 y- [
prices, due to a slight seasonal slowdown in the third quarter as inventory
2 G% m+ v; U0 L& A6 Flevels rose. Part of this can be attributed to the fact that many renting! B8 d( Q# i/ k- R+ N0 F- D, q5 G7 i
first-time buyers were motivated to close on the purchase of a home by July 1,
( L) @' ]8 _, {when rental leases expire in Quebec. Once this date has passed some of the& x7 p7 R3 \' A5 V
pressure is taken off the market, allowing buyers to visit more homes before
' }7 j" n' ^' ^making a purchase.
# T6 f+ \: T! c) ?
2 k# z" @$ c. B: {# A Ottawa held its position as one of the country's most stable housing& b$ y6 y0 b$ l5 }* X7 F5 q
markets in the third quarter, reinforced by a vibrant local economy and strong0 [- a6 h0 E2 L9 C" j
confidence, resulting in modest increases in average house prices. The city: @3 B1 P2 w. C6 e. h
centre remained a bright spot in Ottawa, with homes in this area attracting1 J0 N! w' p+ W& i1 [* i6 | ]
attention due to their convenient location and proximity to downtown
- ]7 {% I2 M. W! U. Z; d. ^& lamenities.
, B% b; e" u: Y3 z/ A9 J2 V. u% r& U) S% l8 q' l
The housing market in Toronto sustained healthy activity levels
M1 ^: u; o1 F7 @, D0 |throughout the third quarter, as a strong economy helped to maintain demand6 z) i5 W/ Q& J1 o( B% ~: n" `
across the city, causing average house prices to rise moderately. Toronto has. z: G5 C; J, ]9 Y- r
continued to experience modest growth in average house prices, and has been
' Z6 S; D% |4 M8 idriven primarily by purchasers who are buying homes as their principle
+ s6 n4 r$ v. E: q# F1 _9 A1 Vresidence, rather than for investment.: M' `9 v X# m2 X" U& G% g
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The vibrant Winnipeg housing market continued to show its strength as
2 l. \# f2 x X3 hhouse prices rose during the third quarter. The booming local economy resulted
0 c; t, m( Q5 N! ?in a historically low unemployment rate, helping to bolster consumer, Z0 E6 c& s. M! P T( U, I, ~( z
confidence and Winnipeg's ranking as the city with the lowest capitalization
/ T! B$ I$ I. q2 {& grate among the country's larger cities - helped to encourage buyers to enter$ b9 P7 J/ H! w
the market.
' q5 O+ t# o9 H3 v ~
7 h* E9 q, i) X; c* @9 `0 {% T In Regina, the market experienced a slight seasonal slowdown through, y4 q' Y7 U6 D. A* \- @7 @
July, as there were fewer purchasers in the market due to summer vacations. In" O- h5 l- T2 R$ B1 b0 v' [
August, activity resumed to the busy pace previously seen in the spring
2 h: f4 k: l& g: [1 r$ ]months, as the influx of purchasers made it more difficult to find a home due
" F" X& a- z* @ n- c" L4 ]$ r& Uto the shortage of available inventory.
5 w. c7 z! [% f2 ~6 }! a0 w' x. B. L5 q; }0 l% t
Activity in Saskatoon remained brisk as the market maintained its
0 [# F0 Z3 m2 j4 o$ rmomentum from the busy spring sales period. The economy in Saskatoon remains
) G0 R+ K# l9 @7 X2 Xvibrant, as employment opportunities are abundant with many businesses8 Y6 d2 K& s' e0 z2 l% u! T) \
struggling to make hires and having to recruit outside the province.
1 M, Y; Q' @" M, L5 b8 ]- z3 }/ p$ n0 N; V O- h
Calgary's housing market recorded blazing average house price increases% q7 C$ j% K( {5 z' A' {
in the third quarter, in all surveyed categories. The burgeoning economy, low
8 {5 J Z3 V9 W+ F& {% tunemployment rates and low inventory levels remained the leading factors that/ D6 A" O6 @9 p4 q; K1 Q
pressured Calgary's house prices upwards. However, regardless of the soaring6 l! K: y) x$ E# E
prices that characterized the market - even during the typically slower summer
2 X/ e& t/ Z0 Y+ L; v5 Q6 Sseason - it is expected that activity will become slightly more balanced, as
! k7 U5 o4 y3 e) C1 q4 w c& Wbuyers are becoming more reluctant to participate in the frenetic activity.
+ ~8 I/ K* v" E" S s- C7 E1 e- t
4 X! z- |" f! N' X Edmonton's booming local economy continued to thrive in the third quarter% ^) p/ {9 h# |5 h: v
as activity in the oil sands north of the city continued to flourish. Edmonton" O7 j, ^; a" \' {( A5 _5 M
remained the hub of activity for those coming to work in the oil industry,
3 t7 Y+ `( @) {& \maintaining tight inventory levels across the city, resulting in prices
" [1 |6 G3 B) B, e! b) e B* ]6 q! Tincreasing at record levels. However, as inventory levels continued to improve
/ x8 G0 Y, P E# Xin the third quarter the rate of price appreciation should moderate slightly# u# K% Q/ H$ l
towards the end of 2006.
' J( c0 s3 h# ^* R0 J4 F
4 u/ e9 E6 _( iWhile Vancouver has seen a slight reprieve from the severe shortage of
F7 M' j& v$ Y+ o% \inventory that had previously characterized the market, supply is still unable
% S3 u$ } l& d9 ?8 r6 b: ~) rto meet demand, driving house prices upwards. Vancouver has a very diverse
5 o- g* y( Y# ?- I; O! i fgroup of active buyers - from first-time home buyers to baby-boomers to3 L: P' r& ^4 ~6 r% h* `* L0 T+ ~ ^% S
foreign investors - all of whom fuel the demand for houses, placing added4 ~: X. S6 J# G3 R J6 U
pressure on tight inventory levels., l# r# Y7 M" E. S. J8 Q
% K3 a- u) ^# a; v0 P& \
Victoria's market is vibrant and supported by strong economic; {9 W2 M# \$ J0 ~+ k: j% [# ]
fundamentals, fuelled by a booming tech sector and a migration of young people
% M; q2 O$ n; s$ Winto the city that has continued to support the area's house price increases;0 k/ a$ O4 r# l. ~% |2 v
while increased inventory levels have afforded buyers more time when searching
4 m" `# E0 M* l7 Dfor a home, helping to normalize the market's pace.& u( n8 p2 f8 A4 V, I
' \$ f8 \' r+ |, t; z' I: m
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Survey of Canadian Average House Prices in the Third Quarter 20064 g7 S8 {# k3 f# D) E
% y( y0 w H. N# o: l5 V, @6 @* K -------------------------------------------------------------------------: H' a$ Q2 I1 u$ Z$ ^' ?" Q d
Detached Bungalows Standard Two Storey
2 m7 f) \& D5 C5 I: z) | -------------------------------------------------------------------------- n' `4 D' p8 \$ c/ E3 O
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3# F! C9 L& h2 ?; v% [1 V; c
Market Average Average % Change Average Average+ s) i7 G0 v% t, t# K( U. t
-------------------------------------------------------------------------, W" |2 N+ J# P7 z9 i
Halifax 186,333 173,333 7.5% 198,667 199,000
- `0 e7 w3 o3 v. x- P5 G( r, x -------------------------------------------------------------------------
- `+ |) B2 B, A4 Q0 C Charlottetown 145,000 141,000 2.8% 175,000 170,0008 }+ K& K- H+ M7 w4 P
-------------------------------------------------------------------------
$ O6 ^, d% M! e9 k. m Moncton 135,000 127,000 6.3% 129,000 123,000
" @# I7 r1 `% Q, J# l" J7 B -------------------------------------------------------------------------
! h1 e6 c; v: N _4 {1 } Saint John 141,200 142,900 -1.2% - -
9 h1 s) i" @& o3 f -------------------------------------------------------------------------
3 C% U8 l7 a, j4 G% G+ ?. B$ j St. John's 143,667 142,667 0.7% 200,667 202,333# d$ `( l5 w% o
------------------------------------------------------------------------- g6 [1 J. r: r8 k$ D" ~
Atlantic 150,240 145,380 3.3% 175,833 173,583
8 f( v0 i( w7 R3 a& Q+ l5 @* x -------------------------------------------------------------------------
! x& p# f( G4 W( Q9 X Montreal 213,691 203,500 5.0% 321,141 316,185
& Z1 s. {- L/ `! b! `" d6 d -------------------------------------------------------------------------
" _3 n! ]2 R# }8 g4 h Ottawa 290,083 278,417 4.2% 285,667 273,250) F. T/ P/ u* O
-------------------------------------------------------------------------
2 q' M) j/ @8 n6 ?( L1 n Toronto 373,368 355,882 4.9% 481,523 474,766* ~+ P. e9 O8 Y* ?! O6 h `
-------------------------------------------------------------------------
1 n: k5 O$ R V8 p" K Winnipeg 181,579 159,860 13.6% 202,337 180,707
8 C3 n F2 Z* ?% _7 j -------------------------------------------------------------------------
; m' I* Z0 t7 j# h' P% | Saskatchewan 170,667 156,083 9.3% 182,600 166,500' h/ M3 b! V6 A/ R( M8 \% x
-------------------------------------------------------------------------2 S; q& p. g) t5 P3 F0 h
Calgary 395,067 252,411 56.5% 405,778 264,389
) [: Z" T, I& ^+ x& x( i5 t -------------------------------------------------------------------------7 a5 y0 }- Q' x" P
Edmonton 286,857 194,857 47.2% 316,429 206,714
: E& \4 c/ b+ v -------------------------------------------------------------------------% L; }$ }6 M* }$ ~9 }: v; q
Vancouver 704,250 601,000 17.2% 794,000 697,500
# u5 r; k |9 k: m/ ?& Y z -------------------------------------------------------------------------# k% g; j: r" H) T
Victoria 375,000 348,000 7.8% 403,000 391,0000 J1 s3 Q) Z/ ~ i
-------------------------------------------------------------------------
5 W$ F* z1 l6 |+ S2 f2 Y7 P National 300,365 258,202 16.3% 365,380 322,860
: }" t) @- y* D' q# k8 G -------------------------------------------------------------------------! E9 _5 j6 d0 d# ~; V
* ]% }) V; L/ i, f9 @- t% I: e -------------------------------------------------------------& ?9 L& `* Z3 w
Standard Condominium
2 n, b U* j& d9 t -------------------------------------------------------------
- @5 d& Z8 @4 W$ q+ C; Q) e 2-Storey 2006 Q3 2005 Q3 Condo# m9 l3 W0 p0 y9 T
Market % Change Average Average % Change0 `' o! T4 `+ ?4 F' Y. {% Z. O
-------------------------------------------------------------$ j! Y0 Y. p- N( m$ t
Halifax -0.2% 142,000 103,000 37.9%. r+ H4 K. w/ m$ p
-------------------------------------------------------------
5 m u7 d, f6 b6 w4 A, s1 U! ? Charlottetown 2.9% 98,000 98,000 0.0%
6 A4 v1 `% s8 l- {& d7 K% G5 T" \ -------------------------------------------------------------" B+ \. j% h7 G: {
Moncton 4.9% - - N/A
0 p& D6 r: ^5 R: F7 M: r -------------------------------------------------------------* O- n# T/ x' K' {4 i7 I6 T
Saint John N/A - - N/A
- a3 Y1 ~+ j; b' I3 r -------------------------------------------------------------+ D' A6 D; p% k+ o5 g) q# _2 d
St. John's -0.8% 146,333 145,667 0.5%' Y" A% l# Z" Y; ^
-------------------------------------------------------------: p" x4 I6 J) A! N' O
Atlantic 1.3% 128,778 115,556 11.4%/ P5 {% q. |% U
-------------------------------------------------------------" d3 ^, O- M6 z4 I, R! N9 |6 w: ]
Montreal 1.6% 193,190 188,016 2.8%
4 g) L; e+ r8 k2 N -------------------------------------------------------------' n. ]3 Y) p9 S4 s
Ottawa 4.5% 181,083 172,250 5.1%6 q8 M1 g( K! l
-------------------------------------------------------------
% t4 C! R0 \. @) M/ c, K5 | Toronto 1.4% 252,088 242,918 3.8%
5 {; u5 @4 L6 ]6 a1 t" P -------------------------------------------------------------8 `2 F" |% o- |
Winnipeg 12.0% 105,648 96,008 10.0%8 o% N3 {; s' |* \
-------------------------------------------------------------
+ E0 a: x ~7 y6 o% N Saskatchewan 9.7% 106,250 101,000 5.2%- E6 s2 ]. |8 l: B' N* i
-------------------------------------------------------------
. y: Z o+ z, V6 J4 J Calgary 53.5% 245,844 153,867 59.8%0 F! m# T0 l& N1 Y }, H
-------------------------------------------------------------( Y) O" W q" e% `/ L
Edmonton 53.1% 200,433 131,500 52.4%
1 U) l! q. R. x -------------------------------------------------------------( d- v" n3 I! J- M: y2 f
Vancouver 13.8% 366,250 323,250 13.3%) m. b6 N" r; t
-------------------------------------------------------------" S, g) p4 ]0 u$ C! U
Victoria 3.1% 229,000 220,000 4.1%
& |. M1 u2 b! ~5 E& _ -------------------------------------------------------------
0 s4 ~5 C8 c" }/ X. u# p National 13.2% 211,562 185,296 14.2%1 ]* `6 Y9 a+ x. _& A
-------------------------------------------------------------8 E" n: h/ T+ Q
>>
* k5 |4 \0 @, p# n( v6 r
/ T" K s) z" T Average house prices are based on an average of all sub-markets examined& O9 P T, Z( G7 ^# y+ ~2 C3 B' a
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
* Q+ O: B: {" u5 c" c7 O* wJohn and Victoria.
/ ^7 u$ l" D2 U
* W# B& S: I. v7 S( n1 ? The Royal LePage Survey of Canadian House Prices is the largest, most
& v( z8 U' \3 T! [" bcomprehensive study of its kind in Canada, with information on seven types of9 _0 J6 x* c$ P& U* K6 W p3 S& d
housing in over 250 neighbourhoods from coast to coast. This release
/ x/ `6 g( q' S5 w; Oreferences an abbreviated version of the survey, which highlights house price+ }$ S4 K& S" Q+ c7 ^9 w
trends for the three most common types of housing in Canada in 80 communities" O* i9 c2 V. E% v
across the country. A complete database of past and present surveys is
$ i6 V, ]" h$ T; {available on the Royal LePage Web site at www.royallepage.ca, and current1 n& B3 u& z) O) z
figures will be updated following the end of the third quarter. A printable
! p @. ^# I5 ?6 K# G5 l; M9 uversion of the third quarter 2006 survey will be available online on9 `' A' x9 C9 J z3 k4 h! Y/ _, N7 [
November 15, 2006.
3 [6 X1 D* L4 j% s- C/ ]7 a Housing values in the Royal LePage Survey are Royal LePage opinions of& `, w. c X4 |( c7 L
fair market value in each location, based on local data and market knowledge
2 Y5 V& F! h- g8 d+ r8 _provided by Royal LePage residential real estate experts. Historical data is) g1 W$ D3 {$ A5 J* l+ {
available for some areas back to the early 1970s. |
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