experienced significant gains over the past 10 years
See the graph on my site showing the previous 10 to 15 year run-up of real
'Wild card' props up Canadian housing markets over past decade, says RE/MAX
Inventory remains key to stability in 2011
Tighter inventory levels helped to make the last decade one of the
healthiest periods on record for Canadian real estate, insulating markets in
major centres from the peaks and valleys characteristic of past decades,
according to a report released today by RE/MAX.
The RE/MAX Housing Barometer Report measured monthly sales-to-new listings
ratios in 18 major centres across the country from January 2000 to December
2010. The report found strong seller's/balanced conditions prevailed for
much of the time frame, prompting significant gains in housing values. The
lone exception was when the market dipped into buyer's territory during the
latter half of 2008 and early 2009. However, fewer listings served to
offset diminished demand and provided greater stability. Average price
increases from 2000 to 2010 ranged from an annually compounded rate of
return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in
Regina. Quebec City and Greater Montreal saw a return of 9.2 per cent and
8.48 per cent respectively. The national average was 6.82 per cent. By far
the tightest market in the nation was Winnipeg, where seller's ruled the
roost for 85 per cent of the decade, followed by Hamilton-Burlington (67 per
cent), Regina (63.6 per cent), Kitchener-Waterloo (59.8 per cent) and
Edmonton (57.5 per cent).
"There's no question that price appreciation has been solid over the past
decade, in large part due to tight supply, but history tells us that
exceptional growth supported by sound fundamentals is healthy," says Sylvain
Dansereau, Executive Vice President, RE/MAX Quebec. "Concern is only raised
when the underpinnings are insufficient to justify the trajectory. Canada's
real estate markets measure up to conventional wisdom. Quebec markets, in
particular, have performed exceptionally well since 2000, bolstered by job
security, lower interest rates, and a growing belief in homeownership. The
next decade is expected to bring more of the same, with inventory once again
playing a key role."
A number of city centres are already reporting stronger than usual housing
activity out of the gate, with first-time buyers comprising the vast
majority of purchasers and move-up buyers in close pursuit. Quebec markets
are no exception. Demand and supply are on relatively even keel at present
in most areas, but the traditionally busy spring season is expected to keep
the market at a perfect equilibrium in the days and months ahead. However,
there may be some exceptions to the rule. The country's largest markets-
Greater Montreal , Greater Toronto , and Greater Vancouver-are expected to
head into the second quarter with fewer listings overall. Two
centres-Newfoundland & Labrador and Kelowna-are still firmly entrenched in
"Inventory has always been the wild card," says Michael Polzler, Executive
Vice President, RE/MAX Ontario-Atlantic Canada. "Its influence is
remarkable, but a number of other factors will serve to bolster Canadian
real estate moving forward including land scarcity, intensification,
immigration, continued infrastructure and capital spending, improving money
markets and the rebounding economy. The threat of rising interest rates and
the changes to mortgage lending may also prompt a flurry of activity
affecting price growth in the weeks ahead. Yet, overall, gains in 2011 will
be more moderate than those noted in the past decade."
Western Canada experienced some of the highest rates of return for real
estate over the 11-year period. While values in Regina posted the greatest
percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon
(9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater
Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per
cent) all outperformed the national average.
Equally strong gains were posted in Quebec. While solid balanced market
conditions prevailed for much of the decade, housing values in Quebec City
and Montreal rose 9.2 and 8.48 per cent respectively on an annually
Increases were more moderate in Ontario and Atlantic Canada-with the
exception of Newfoundland & Labrador, where values escalated 8.14 per cent
on average. Ottawa led in terms of price appreciation in Ontario at 6.78
per cent, followed by Hamilton-Burlington at six per cent,
Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per
cent, and London-St. Thomas at 4.82 per cent.
"An improved global economic picture, lower unemployment rates and rising
consumer confidence have buoyed home buying activity since November," says
Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.
"While sales figures are expected to be slightly off 2010's heated pace,
housing values are forecast to continue to climb in Canadian real estate
markets in 2011-with most a direct result of lower listing levels."
While the statistics are impressive, they alone cannot tell the tale. The
gains realized over the past decade speak to the tremendous resiliency of
the Canadian residential housing market. Considering catastrophic events,
both natural and manmade, that occurred throughout the period-SARS, forest
fires, ice storms, 9/11, a recession-the performance of the real estate
sector proved that much more significant. It remained a consistent bright
spot supporting economic growth and ancillary spending, and subsequently
helped lead the nation out of the greatest downturn in recent memory-its
hardy nature heightening its appeal as a long-term investment.
RE/MAX is Canada's leading real estate organization with over 18,000 sales
associates situated throughout its more than 690 independently-owned and
operated offices in Canada. The RE/MAX network, now in its 38th year, is a
global real estate system operating in 80 countries, with over 6,300
independently-owned offices and over 92,000 member sales associates. RE/MAX
realtors lead the industry in professional designations, experience and
production while providing real estate services in residential, commercial,
referral, and asset management.
I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
FAX 905-828-2829 CELL 416-520-1577
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