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Canada's housing market both vigorous and stable
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- Country's market poised to show growth throughout 2006 - P7 o% {7 G0 U- N w4 w, [3 u
3 F$ r; k$ F% E TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market g" P2 a; ? ]4 ^$ m2 K9 a% u
exhibited moderate price increases and stable unit sales during the third$ c7 ~8 S: ^& g$ q2 d' H& b& u
quarter. Wide regional variances continued to be the dominant characteristic+ u1 ~+ I* Y- V6 n! N
in the market, exemplified by frenzied levels of activity and double digit! r! Z! `' h ]
price gains observed in the energy and commodity rich Western provinces, and
; S: x7 {* w8 n3 h: Jmore reasonable sales volumes and moderate price appreciation in Ontario,, a: M' {7 Z8 [' Y# r% o
Quebec and Atlantic Canada, according to a report released today by Royal
9 Y) t( U5 e9 k' ALePage Real Estate Services.1 c7 u& A, d7 i/ n
0 V# v: L5 F4 y1 @6 N8 s Nationally, market trends established through the first three quarters
; u N" Y' s4 r2 S- Pare forecast to continue for the remainder of the year. Robust economic4 `# E; ]- R1 e
conditions, low unemployment rates, modestly growing salaries and wages, and
0 a/ ]* C( O2 Y" B! Gsound consumer confidence contributed to the overall strength of the( ?# l0 v* S8 K: C, j) h2 p0 Q7 g
residential real estate sector." c4 n* k( {( o2 ]
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Of the housing types surveyed, the highest average price appreciation. ?7 m1 V# |+ \& B; s$ c
occurred in detached bungalows, which rose to $300,365 (+16.3%)3 v, ]2 ]" C8 L3 t7 z: d. V. x n
year-over-year, followed by standard condominiums, which rose to $211,562* E S/ K6 e4 e1 w3 x+ e5 Z L! J1 }
(+14.2%), and standard two-storey properties, which increased to $365,380; [6 x$ ] r/ c9 i
(+13.2%).
6 O: [$ }* W. r0 j, B; t/ p9 h* P2 i) L) O$ D" Z( P! N
"Canada's sturdy housing market continued to demonstrate steady growth
. r: S. U" R+ \during the third quarter. For all but the west, we have moved on from the* } Y3 Y" K+ ~
frenzied expansion that characterized the first half of this decade, and are" R4 H5 n. S& u% f" _! A
poised to show continued growth at a more moderate pace," said Phil Soper,2 P# ]* M9 T" X7 C# ], |
president and chief executive officer, Royal LePage Real Estate Services.
( x) [& t, d; |) `) z& F4 X8 O9 r"Gone is the sellers' market that we have lived with for some years. We
& V k2 V4 i) p! L+ r2 Xwelcome the more reliable conditions that are characteristic of a healthy
2 t% ]6 E* W2 O9 L' ?4 q/ Xbalanced market."# T' Y# D ^7 [
" a; l, g* @* M | Despite the double-digit rise in average national house prices,
, L3 l2 B5 l" _/ H( h7 o; L( `considerable regional variances were exhibited again this quarter. The shift3 j' j' e! z5 S* F# _
to balanced market conditions, which began in late 2005, has continued4 M& L% U/ r% h# E* L0 R
throughout most of the Central and Eastern regions of the country. In the core
0 Q7 t; d* Y0 i: _- Z+ Z( Lenergy producing western provinces, the combination of very high in-migration,
* I$ K% n) X) w+ z8 B) C$ xmanageable affordability, and a shortage of inventory has driven record
: `' z0 b2 c+ ]+ Wbreaking price appreciations.
# C- D: c0 b) Y$ }7 Z
! Q3 k/ k/ b! D/ A% @9 A, o+ M8 L Echoing the second quarter and supported by Alberta's rapidly expanding
' w- n$ U* {5 t' beconomy, Calgary and Edmonton led the charge of Canadian cities with the& N- }/ o% o! g& ~( s* v, f h
largest house price appreciation in all housing types surveyed.
- _" F0 U0 m5 W* T8 O' }
- Y& Y8 U$ g$ N5 o" ~2 v) }2 ` In Ottawa and Toronto, growth remained steady, supported by solid
- L$ h; X, z* L: \; ~1 Beconomic fundamentals, an increase in available inventory and strong consumer4 T( `% G" h ~* R1 K
confidence. While the pace of price appreciation in Ontario leveled off
; d6 W& u0 g; ~8 y$ @ nslightly, the province's real estate market remains poised for modest growth.
# i0 `' m4 H* D( @( jIn Atlantic Canada, new housing and condominium construction offered buyers
6 I" G9 U* j+ igreater selection at more competitive prices, resulting in a slower rate of' j. y- [" K; U+ ^- }
price appreciation when compared with 2005.6 N& Z& w- c4 Z, M- x
& a1 g0 J( e ^ While the pace of growth in Canada has slowed, the domestic housing
" s2 u" j/ z* U8 S2 \6 n: }. e* \, w( ]market is expected to outperform the American market. The economic and
5 o! y" t( Z; T. w" Z- Kfinancial fundamentals driving the residential real estate sector in Canada
8 ~, f( ?7 O8 I* [are markedly different than those found in the United States.
2 b7 k1 Z5 k) Y( v7 g+ X( U
; Z H; Y/ ^2 u8 {0 B/ P Added Soper: "Canada's housing market is likely to outperform the' ?, f% o9 M: G' \# G. V4 s5 w
American market through 2007. A number of factors are working in Canada's2 N2 \" W8 V3 S" i1 I5 b
favour, including healthy personal and governmental debt levels, the
5 g9 @( x; r! i q' A7 \$ E" j' A) |relatively modest rise in interest rates in our country, and general
& i1 e% F1 V7 saffordability in our major cities. In addition, Americans are now seeing the2 q6 X1 h0 `! l% v8 }
downside of a tax system that encourages maximum homeowner leverage, and. C+ L! |" V4 E+ p
aggressive financial products such as zero- and negative-amortization
# p3 w$ p3 p! nmortgages that work only in a high price growth environment."
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& j( d" ]# Q7 R+ _! g* g& O <<
4 j% R/ ?/ i3 G) D8 r REGIONAL SUMMARIES
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Balanced conditions continued to characterize the housing market in" k# S9 ^/ V. r9 \, c) }
Halifax, as significantly higher inventory levels helped to moderate the rate
' V0 |, Z# L- E3 Cof price appreciation. Buyers were increasingly choosy, taking more time
- t+ U0 r3 l& klooking for newer, low-maintenance properties that were not in need of
2 c/ w2 `; ^- h. o" c) krenovations.5 E( ]1 B6 b" j& L! b3 I% V5 b
. D8 y3 Q4 r. h9 ?2 O The housing market in Moncton remained healthy and strong as a slight
% o0 S1 S% \: L$ J/ oincrease in inventory helped to moderate the rate of price appreciation
& A: f& Z+ L1 \9 o" z2 U. ecompared to the same period in 2005. Activity was brisk throughout August and
$ z# S+ E+ G& \) i( H! w+ f. nSeptember and is expected to remain this way through the fourth quarter., p7 ~% A; ?% Y9 a& F
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The housing market in Saint John underwent its traditional summer
3 M v; t0 A7 i" b& b4 c$ Nslowdown in the third quarter, with activity picking up towards the end of the5 v* e0 y6 f2 ^- g
quarter. The local economy continued to thrive, as construction on a new
' K" Y3 ~/ @* Q* |' V. G600,000 square-foot shopping area has begun, bringing several new box stores
8 d6 f9 C& a% T- t% Yto the area. Buyers have begun seeking less expensive fixtures for their homes
9 s% r( @+ W5 b9 ?- I# O1 W0 h8 z4 Zand are instead opting for more affordable housing options.) Q4 Y8 A+ Q, T4 Q
$ v7 ]3 p, k/ o( Z# Z! u$ N3 ^3 @
In Charlottetown, the housing market started to move towards balanced5 L3 c# p3 Y) L: l4 F- r
conditions, as some sellers had to begin to lower the asking prices on their( c3 J) r4 h' _" s8 q; {
homes to make them more competitive. Activity from out-of-town and US buyers/ i- s" \+ q K# R! X
was down slightly compared to 2005, likely attributable to the strong Canadian
) W" j' t% x& ]- N5 L! @ I" a$ ldollar. Inventory levels began to creep up in the third quarter, providing
! ]9 V9 i% k Z' |/ |* Jbuyers with more options when looking for a home.
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Activity in St. John's slowed slightly in the third quarter, particularly
3 B m+ {7 L% |' W8 E5 M+ r' jamong higher-priced properties, where there was a slight over-supply of homes; n& G+ A4 t) v
priced over $200,000. Listing periods have increased when compared with 2005,
$ ~# Y. M9 @2 D5 h7 T; u+ i( Mas some of the pent-up demand that had characterized the market over the last
$ Q" z" K* l& a: |" e' H: v) `$ Rfew years has been satisfied, resulting in more normal, balanced conditions.
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' c. m* O1 P& V+ J' `1 a' R Montreal's housing market recorded modest increases in average house
" }+ h& |1 K d, E) lprices, due to a slight seasonal slowdown in the third quarter as inventory& g8 Z' n$ ] H, \+ z9 ]
levels rose. Part of this can be attributed to the fact that many renting
( w* ]- E q: n2 H. J* d, n. I1 Afirst-time buyers were motivated to close on the purchase of a home by July 1,; G8 f! l6 u# h8 o, D9 ?! A
when rental leases expire in Quebec. Once this date has passed some of the2 [ ?% B' O" J% e6 Q
pressure is taken off the market, allowing buyers to visit more homes before
. {* T' D4 \# Q; F \, |0 `) C0 Umaking a purchase.( v# J6 E9 t7 u9 B' ?
U7 P5 X& C! H* B1 E/ t
Ottawa held its position as one of the country's most stable housing
/ A9 r X* f9 W$ [9 g4 I6 Pmarkets in the third quarter, reinforced by a vibrant local economy and strong
$ H# h# s! }7 C' A! Nconfidence, resulting in modest increases in average house prices. The city
/ Q. v+ Z9 G! [+ I1 u# bcentre remained a bright spot in Ottawa, with homes in this area attracting
' Y6 C2 Y( u2 I& j8 Z/ l. \+ y8 L) [attention due to their convenient location and proximity to downtown
( C/ @4 Z. j' X$ @# i' e# |amenities. H9 v/ ]. Y p' e& E# L
& w" q5 f8 U" {7 g$ W The housing market in Toronto sustained healthy activity levels
- O- |8 A* o7 `( @' p' _1 Kthroughout the third quarter, as a strong economy helped to maintain demand. J; a. d, E6 ]& g
across the city, causing average house prices to rise moderately. Toronto has
; w& @- ?$ j1 s6 W- {2 N1 kcontinued to experience modest growth in average house prices, and has been+ O6 D" N! L! }$ ~1 v
driven primarily by purchasers who are buying homes as their principle
) j5 Z5 w) |9 F7 g' Sresidence, rather than for investment.4 G. J) M4 l5 Q+ g2 P0 B
" _( F0 ^5 Q! l( S- v The vibrant Winnipeg housing market continued to show its strength as" `5 H$ ^8 D* r. H! }
house prices rose during the third quarter. The booming local economy resulted
7 Z2 g* g( S2 F5 \ ~% O, ~, b$ N+ j+ Gin a historically low unemployment rate, helping to bolster consumer4 l; ?1 F( Q! z5 E
confidence and Winnipeg's ranking as the city with the lowest capitalization4 b1 P/ d2 W1 o! J3 S
rate among the country's larger cities - helped to encourage buyers to enter
2 d9 @+ u( l; X% s# q7 _- C1 Gthe market.
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. j$ [, J' |, w9 g2 Q1 { In Regina, the market experienced a slight seasonal slowdown through
" G2 z. n* `4 C- {" @5 X8 U) T( o" c8 yJuly, as there were fewer purchasers in the market due to summer vacations. In
: _- x8 V& u7 CAugust, activity resumed to the busy pace previously seen in the spring F5 t, G& u+ y( f( }: ~+ l# t& d
months, as the influx of purchasers made it more difficult to find a home due `3 S s9 G# H R
to the shortage of available inventory.
% K* m- G8 v/ e2 q* ~
; X8 U: y: N: j% c) l Activity in Saskatoon remained brisk as the market maintained its" K( l7 } b% ^
momentum from the busy spring sales period. The economy in Saskatoon remains
$ z. M7 t* @) S5 \, E+ svibrant, as employment opportunities are abundant with many businesses. Q7 h C; E; _; G1 ^, H) a Z
struggling to make hires and having to recruit outside the province.# L2 V' l' i5 t: x% |, r, H
# d, T( H; o, |) H, P! X1 b5 m Calgary's housing market recorded blazing average house price increases+ y6 I9 z$ H$ J# V
in the third quarter, in all surveyed categories. The burgeoning economy, low
) O* F& s( W+ z% Dunemployment rates and low inventory levels remained the leading factors that. c4 I% V3 c) b$ B; H
pressured Calgary's house prices upwards. However, regardless of the soaring
7 W/ f+ ?) e9 M$ m6 _, ~! ~prices that characterized the market - even during the typically slower summer
- k* W" x$ b% dseason - it is expected that activity will become slightly more balanced, as
) w4 P. W& N9 i- q( J1 x# Qbuyers are becoming more reluctant to participate in the frenetic activity.
9 a+ V0 W! R, r' }' R& t7 s7 J* P; f' b4 o: P+ `5 E$ J
Edmonton's booming local economy continued to thrive in the third quarter- o/ B8 _. r; |% f
as activity in the oil sands north of the city continued to flourish. Edmonton
& q8 q& m4 l$ wremained the hub of activity for those coming to work in the oil industry,9 W; N k) M& J I; E% z0 T3 r
maintaining tight inventory levels across the city, resulting in prices
% g* j; w5 v8 qincreasing at record levels. However, as inventory levels continued to improve
9 `) G& ^6 b& [! H9 s$ {" | d; Qin the third quarter the rate of price appreciation should moderate slightly* S+ c* n* R! d& M* K* E0 a$ V
towards the end of 2006. ! ~3 V9 c, ~1 X$ o) ~; Q! S& N! F7 i
* S, I' p4 g& H" R
While Vancouver has seen a slight reprieve from the severe shortage of
" m0 D$ u1 v' hinventory that had previously characterized the market, supply is still unable
" v( \! _. F% D& {0 P/ S( u/ X: vto meet demand, driving house prices upwards. Vancouver has a very diverse
8 i. p' r1 U" o8 _* Ygroup of active buyers - from first-time home buyers to baby-boomers to% h+ e, [$ H! k0 c8 H3 u) A
foreign investors - all of whom fuel the demand for houses, placing added
3 h$ ]9 Y: x, H/ i) |pressure on tight inventory levels.
, R9 l+ f0 y/ ]1 y4 Y$ f2 S
$ Z- p; `: b' G3 U( ~% K( k- { Victoria's market is vibrant and supported by strong economic
, ~0 j$ ^1 {8 N- s1 F Sfundamentals, fuelled by a booming tech sector and a migration of young people
l# V! ?$ g6 j {8 einto the city that has continued to support the area's house price increases;& P9 h! _4 S: {" _' j( t2 M! n
while increased inventory levels have afforded buyers more time when searching: U; H/ j& {! H+ l6 _, b
for a home, helping to normalize the market's pace.8 g. G( Z: g; V, F
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<<- j! Z7 z: ]" q( L, S$ G* s e: r
Survey of Canadian Average House Prices in the Third Quarter 2006! K5 L& ~( k7 _% Z
0 r) [) v/ {/ D; L
-------------------------------------------------------------------------, H! @' A) I& x0 X
Detached Bungalows Standard Two Storey% D" Q" H6 z) M* C3 Y
-------------------------------------------------------------------------7 V, U0 c: b8 @6 C& j6 c& h
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
( S1 z4 ^+ K1 O Market Average Average % Change Average Average3 H# ~$ _7 j- G/ H- v, d
-------------------------------------------------------------------------
. V, R) V# [/ Z# @ Halifax 186,333 173,333 7.5% 198,667 199,000" n' X5 Z6 S( R; y- e
-------------------------------------------------------------------------
# y4 m& z5 L4 J Charlottetown 145,000 141,000 2.8% 175,000 170,000' B: ~! O, y0 q/ R' u
-------------------------------------------------------------------------
# k+ O9 y: R" B5 y0 h/ q( @6 b Moncton 135,000 127,000 6.3% 129,000 123,000
! d, _2 R+ ]: \6 a -------------------------------------------------------------------------
, D$ u( h* ?* F0 [4 ?6 C7 ? Saint John 141,200 142,900 -1.2% - -- l/ ~; ~7 G" Z% {8 ]
-------------------------------------------------------------------------3 T, T5 R2 q( b+ _& I1 _
St. John's 143,667 142,667 0.7% 200,667 202,3333 Z$ n( j/ }" ^1 ]; F
-------------------------------------------------------------------------
6 N, Z8 I5 u/ c: B) x W/ L: P) D Atlantic 150,240 145,380 3.3% 175,833 173,583
' z1 t) X! s' @: M -------------------------------------------------------------------------0 r6 Y' }& D! u: X. l6 b! w
Montreal 213,691 203,500 5.0% 321,141 316,185
S' y0 ?6 }0 G: T7 K5 {; e( v% ~ -------------------------------------------------------------------------
8 Z# O! p# p5 p- w3 _ Ottawa 290,083 278,417 4.2% 285,667 273,250" S3 n) c9 n$ v% @, F
-------------------------------------------------------------------------( N) {, A) z5 _: L6 x! P4 w
Toronto 373,368 355,882 4.9% 481,523 474,766
3 d' D- z' _5 z6 ^) m -------------------------------------------------------------------------
' ]4 _* H: z: ]9 s Winnipeg 181,579 159,860 13.6% 202,337 180,707
% ?" ^) F" {4 A4 k7 B. w! d -------------------------------------------------------------------------( T- {& X3 J# j2 M: r
Saskatchewan 170,667 156,083 9.3% 182,600 166,500/ m/ b* u# r T6 ?, z: [
-------------------------------------------------------------------------
# W* F7 h4 x8 l Calgary 395,067 252,411 56.5% 405,778 264,389
! [& H: V" `$ ^. | -------------------------------------------------------------------------" e& ~( A+ p3 x+ N& z
Edmonton 286,857 194,857 47.2% 316,429 206,7145 w3 [& i7 J: t% o2 v/ Q n7 l
-------------------------------------------------------------------------* \3 X. g/ h6 X/ h
Vancouver 704,250 601,000 17.2% 794,000 697,500
1 l# j0 U% f+ J; X0 { -------------------------------------------------------------------------
: C* E# p. Y1 h9 k, J/ y Victoria 375,000 348,000 7.8% 403,000 391,000
8 l3 I: m% T1 u% e3 v1 l$ v -------------------------------------------------------------------------1 c3 { a. q8 ]2 Q% K' a n
National 300,365 258,202 16.3% 365,380 322,860
& {" Q& O% J( Q0 Z5 X) X -------------------------------------------------------------------------
' w( Z: K; g }, [8 N- P8 Q! g
7 \3 f' c: f/ E5 s1 m/ D -------------------------------------------------------------! ]; V, M% p. _$ q3 t: n1 M
Standard Condominium: A8 R" b2 h- D% q& a& }! t3 N
-------------------------------------------------------------
% B6 O! |5 y, n3 X 2-Storey 2006 Q3 2005 Q3 Condo1 M, M& i4 a2 z3 O# w+ Q
Market % Change Average Average % Change
' C. h& d! u& |" g8 z -------------------------------------------------------------
8 Y0 t, ]2 y/ G3 |8 e Halifax -0.2% 142,000 103,000 37.9%
+ q) r! N6 F2 [; F: @ -------------------------------------------------------------$ e4 ]- \& ]# L& q& @/ Q5 F
Charlottetown 2.9% 98,000 98,000 0.0%' E( d9 v9 @ {* [
-------------------------------------------------------------' u& [: @2 D, D
Moncton 4.9% - - N/A! B4 i* E3 G, ~: V1 p
-------------------------------------------------------------! P9 E4 y1 l; b, q3 S: ^
Saint John N/A - - N/A& Z X) {- c+ G, [+ G
-------------------------------------------------------------' H" b6 f4 ?$ H* ?
St. John's -0.8% 146,333 145,667 0.5%
" K4 E; K d+ U! T5 E( A -------------------------------------------------------------
* ^$ _1 Q. T: W Atlantic 1.3% 128,778 115,556 11.4% v4 M# [4 @2 l) Z7 F1 v
-------------------------------------------------------------
7 K# @" B" W% }: @6 P2 v Montreal 1.6% 193,190 188,016 2.8%4 J2 O! Y& v% c: g4 ^
-------------------------------------------------------------, \# K# p4 ], Y" b" D
Ottawa 4.5% 181,083 172,250 5.1%& } i" E% e) y. V( {4 P- L5 w
-------------------------------------------------------------
, _7 h% T, k& K& _$ A- L/ v. Q Toronto 1.4% 252,088 242,918 3.8%
i/ H# s) g9 J% l8 z -------------------------------------------------------------
$ d# F! ~3 M3 R6 m# s) z# z f Winnipeg 12.0% 105,648 96,008 10.0%
$ F: R4 F! s6 ?4 W( H6 G: C -------------------------------------------------------------8 Q0 @9 b- C. Q/ C+ w
Saskatchewan 9.7% 106,250 101,000 5.2%/ ]( e8 L0 F# N
-------------------------------------------------------------: W) @2 `5 r) ?7 o9 n4 H
Calgary 53.5% 245,844 153,867 59.8%
. j) b5 D$ H" {0 J# O -------------------------------------------------------------
; p& o8 [ h: X0 N# e5 w; X0 ` Edmonton 53.1% 200,433 131,500 52.4%! {' o4 z. H; Q6 U* U' q0 F
-------------------------------------------------------------; {* n: i" P( l& }; l
Vancouver 13.8% 366,250 323,250 13.3%/ p4 A7 v8 f) @& J# q! R5 j( G
-------------------------------------------------------------$ O, _5 |9 d- C( E1 D/ r
Victoria 3.1% 229,000 220,000 4.1%
+ H3 N3 b0 x6 W% G- n. f -------------------------------------------------------------, j2 z- r) O, a, b7 H' w
National 13.2% 211,562 185,296 14.2%9 M+ r5 n% d s1 {9 r7 {- V
-------------------------------------------------------------
0 O- s% A4 w& p9 r' w/ H3 c >>
; a9 f( R8 i9 R& S' v* P( l" q
$ Z8 v2 O0 K+ N" [5 D5 S0 P8 r Average house prices are based on an average of all sub-markets examined) F1 [5 |+ h# h
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
; n# d+ X# ?8 Z9 u0 @4 F! C8 WJohn and Victoria.' r# |/ ?! B8 K$ w# g* [% ~5 q
1 A# y& ^. l( M* e. ^+ t
The Royal LePage Survey of Canadian House Prices is the largest, most
# W: ^. e0 D' x7 s6 b! k0 C, T+ A* [comprehensive study of its kind in Canada, with information on seven types of8 p: c# I3 ]4 s
housing in over 250 neighbourhoods from coast to coast. This release+ R% f& w7 Z; R
references an abbreviated version of the survey, which highlights house price
" ^8 `( A7 y, Q. ]( i9 Ktrends for the three most common types of housing in Canada in 80 communities
* ?0 V1 ]; _7 ~6 }: U. C* U7 _across the country. A complete database of past and present surveys is# U' Q7 I" t3 G8 {
available on the Royal LePage Web site at www.royallepage.ca, and current
6 A1 J0 G V# }* X- z% jfigures will be updated following the end of the third quarter. A printable
) H1 O* c6 _/ Q& o5 Bversion of the third quarter 2006 survey will be available online on
3 W$ c4 E. k3 f) ]$ c! h6 j% G; T2 Q5 M. aNovember 15, 2006.
, V2 o: q, W+ _6 I Housing values in the Royal LePage Survey are Royal LePage opinions of; m: a& a- Q( O: _
fair market value in each location, based on local data and market knowledge
( d. P( A% d% E z( ]$ sprovided by Royal LePage residential real estate experts. Historical data is1 i9 [5 ]3 r/ q7 j5 L
available for some areas back to the early 1970s. |
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