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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 -3 L, A. Y3 I% v% N- C, _
: N2 P" W. v$ \: n. _2 p# b7 k
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market, A9 b# \" G m* C9 H# p7 p
exhibited moderate price increases and stable unit sales during the third
. F1 }2 ]8 a: n/ ]quarter. Wide regional variances continued to be the dominant characteristic. `, z# ^# y3 h4 P, }, m# T' X1 {
in the market, exemplified by frenzied levels of activity and double digit
& l% W6 I& ], ?price gains observed in the energy and commodity rich Western provinces, and z; t8 N; P. S S8 s# j
more reasonable sales volumes and moderate price appreciation in Ontario,
5 q* U. u$ }# k# C HQuebec and Atlantic Canada, according to a report released today by Royal
8 o6 j4 @6 I8 G' D; ~1 t/ tLePage Real Estate Services.
. I- P& t7 a7 K$ ?. m) D" J$ a5 N0 S; f, l
Nationally, market trends established through the first three quarters# o2 {- S; Q" ]% C- W0 F
are forecast to continue for the remainder of the year. Robust economic) I, I$ N0 K+ N7 x W
conditions, low unemployment rates, modestly growing salaries and wages, and7 {+ V. q+ o* T5 g
sound consumer confidence contributed to the overall strength of the* P- t* x7 L. |. W/ r" ?1 a( ^
residential real estate sector.) j. D4 T' [& t2 X
; k3 p$ S! ^1 n. o9 o
Of the housing types surveyed, the highest average price appreciation7 A/ ]' M' w5 Z$ g3 W5 C: I& P
occurred in detached bungalows, which rose to $300,365 (+16.3%)
% `, b5 M: m$ b* Z! h) ]8 t f* Yyear-over-year, followed by standard condominiums, which rose to $211,562
& \) g s; X+ W(+14.2%), and standard two-storey properties, which increased to $365,380
9 ] h( |, z' j9 r5 }( L(+13.2%).
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"Canada's sturdy housing market continued to demonstrate steady growth _2 P \; ^* Q( S2 V, z
during the third quarter. For all but the west, we have moved on from the
9 C$ `4 N# Q4 Dfrenzied expansion that characterized the first half of this decade, and are e$ E' X |, y+ l& i
poised to show continued growth at a more moderate pace," said Phil Soper,) v' g# M& S! [: j
president and chief executive officer, Royal LePage Real Estate Services.
8 E! {" Z& s* f2 @% E"Gone is the sellers' market that we have lived with for some years. We5 J9 Q$ Y# N8 ]
welcome the more reliable conditions that are characteristic of a healthy6 o. H% N2 t; E
balanced market."8 z# u$ i% W6 d* ^' N
* c! `1 U& q: l Despite the double-digit rise in average national house prices,- v" x- A9 o' I
considerable regional variances were exhibited again this quarter. The shift$ C& k: [9 Q7 l0 g6 o# K0 H. h
to balanced market conditions, which began in late 2005, has continued6 C4 b) \( m, g6 c0 c
throughout most of the Central and Eastern regions of the country. In the core
/ T& t, E" k7 Lenergy producing western provinces, the combination of very high in-migration,6 T+ G+ I) [. N! Y2 _1 M
manageable affordability, and a shortage of inventory has driven record
/ ^8 F8 F; G" H) ]breaking price appreciations.4 u$ p5 B5 W9 Z$ O' U0 q
! f* {3 ]/ D. p9 t Echoing the second quarter and supported by Alberta's rapidly expanding
( e, R" h8 F/ v% K3 f) l/ Eeconomy, Calgary and Edmonton led the charge of Canadian cities with the2 u" k7 B( t2 u; t# w$ O* N! r
largest house price appreciation in all housing types surveyed. [) G# G8 ?" e1 g* F3 p# s
9 V" v6 Y2 \, ~! k; q: d* a& x In Ottawa and Toronto, growth remained steady, supported by solid
0 F( |( m# B W% N. o' ceconomic fundamentals, an increase in available inventory and strong consumer" G* W* u$ I4 k: v) A0 _/ O& R$ a
confidence. While the pace of price appreciation in Ontario leveled off# [. _9 H- U& _+ s
slightly, the province's real estate market remains poised for modest growth.: a! {4 J8 [) g/ \, r4 {* C/ V
In Atlantic Canada, new housing and condominium construction offered buyers
5 A. Z7 w9 b4 p {greater selection at more competitive prices, resulting in a slower rate of% ]- b1 L2 l; W) f
price appreciation when compared with 2005.
( ?7 a: z" m# V2 L
; n6 d! t" }9 T, k While the pace of growth in Canada has slowed, the domestic housing
- l0 o# U. e* [! rmarket is expected to outperform the American market. The economic and
^( t$ H7 v3 {# Xfinancial fundamentals driving the residential real estate sector in Canada
# p# k1 Y; d1 b" r0 vare markedly different than those found in the United States.! q, r* R6 [* K4 t# l* O
+ i) U9 G' W q; @- I5 v8 m Added Soper: "Canada's housing market is likely to outperform the
' g ~7 K5 w: m/ BAmerican market through 2007. A number of factors are working in Canada's
# s4 X, ^. @- A6 j8 U; ?- [favour, including healthy personal and governmental debt levels, the
. t6 y. x. |3 K" erelatively modest rise in interest rates in our country, and general% `5 C* p# [6 t8 b
affordability in our major cities. In addition, Americans are now seeing the( x5 v/ a+ _. k
downside of a tax system that encourages maximum homeowner leverage, and8 T7 ^5 T p) ^+ n9 g
aggressive financial products such as zero- and negative-amortization
$ _6 w& C( o+ u. \/ s/ f6 W; ]9 Imortgages that work only in a high price growth environment."
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' q: J9 E- M1 _4 i" G; | <<$ z* d& f1 z4 l* v( L. r6 T
REGIONAL SUMMARIES" Y5 K. l7 o; d& v* G1 r
>>
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Balanced conditions continued to characterize the housing market in" F8 }/ H' C5 X! b1 }
Halifax, as significantly higher inventory levels helped to moderate the rate1 t9 T7 I- D: D% v' S6 m5 ]+ v8 c
of price appreciation. Buyers were increasingly choosy, taking more time2 N% N, R1 u: F" `$ w
looking for newer, low-maintenance properties that were not in need of9 D& N) r( C9 n# D8 s% v
renovations.
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5 ?/ B" R/ _* y The housing market in Moncton remained healthy and strong as a slight
& j8 C: h4 { u4 t; d' \3 aincrease in inventory helped to moderate the rate of price appreciation
) p, T6 j: D V9 Dcompared to the same period in 2005. Activity was brisk throughout August and
& Q# X. N# H9 o6 h7 G' O1 {September and is expected to remain this way through the fourth quarter.: m0 i; _" L6 G2 |) s7 @5 I
# ]& ^0 k. b/ t$ J- |% j! t- n The housing market in Saint John underwent its traditional summer7 `. N2 ?) p. @( ~# [& J1 z
slowdown in the third quarter, with activity picking up towards the end of the
7 @' f" _# y9 mquarter. The local economy continued to thrive, as construction on a new- R! s- W4 I& k: D0 e. }: |
600,000 square-foot shopping area has begun, bringing several new box stores, D5 i7 f; T$ U
to the area. Buyers have begun seeking less expensive fixtures for their homes
# f6 b) q3 j/ M* R7 e% |% ~- ^: ?2 Kand are instead opting for more affordable housing options.) J; _' f( Q& H2 f j# [: J% G
/ R9 r8 D$ n8 p In Charlottetown, the housing market started to move towards balanced) Q7 D; X& l& P2 x/ V
conditions, as some sellers had to begin to lower the asking prices on their
2 I/ X l" a X1 B7 k: b1 q& }homes to make them more competitive. Activity from out-of-town and US buyers
$ D. h9 U; f4 j# nwas down slightly compared to 2005, likely attributable to the strong Canadian
) e# _6 E7 m+ R. g; p3 L# Y. B- ]dollar. Inventory levels began to creep up in the third quarter, providing
" I# z3 X2 X8 F$ zbuyers with more options when looking for a home.7 r' F7 ?7 @8 M8 n
7 [' e( y( z+ }. v9 Q& V Activity in St. John's slowed slightly in the third quarter, particularly! }# v5 q/ E( \# E+ [
among higher-priced properties, where there was a slight over-supply of homes9 i9 @4 { k- [3 y2 g( w
priced over $200,000. Listing periods have increased when compared with 2005,0 X4 J% f9 V+ S
as some of the pent-up demand that had characterized the market over the last
0 {, }6 \5 m( R3 H0 P qfew years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house
/ y! `! J" d7 \prices, due to a slight seasonal slowdown in the third quarter as inventory8 l( a: f; b' o7 ]1 Z
levels rose. Part of this can be attributed to the fact that many renting
. F7 b# ~2 M9 e0 c( g( Zfirst-time buyers were motivated to close on the purchase of a home by July 1,
1 P" g' Z$ G) u/ I7 U% A1 ewhen rental leases expire in Quebec. Once this date has passed some of the
! P; L0 I5 l( L" K% M5 _pressure is taken off the market, allowing buyers to visit more homes before5 j$ [; R; @* T5 Z# [
making a purchase.
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7 h" O' }4 [3 ?6 [- T: ~ Ottawa held its position as one of the country's most stable housing. L& k( ]# ?& ]. s1 `5 u
markets in the third quarter, reinforced by a vibrant local economy and strong
2 `. {+ B0 f" U8 rconfidence, resulting in modest increases in average house prices. The city& n( m: d7 {) z/ M
centre remained a bright spot in Ottawa, with homes in this area attracting
3 e+ n. E) Y3 H/ M& U4 o$ n; Iattention due to their convenient location and proximity to downtown7 M6 I6 k" i0 f9 w' H+ p
amenities.
) p- V& b5 Z: N$ L0 I: V/ W+ ]) [3 D% e: w: \8 N* H
The housing market in Toronto sustained healthy activity levels7 d: r! P7 |) U6 I
throughout the third quarter, as a strong economy helped to maintain demand+ b e X: w$ w. Z
across the city, causing average house prices to rise moderately. Toronto has$ v9 ]+ k% D! q
continued to experience modest growth in average house prices, and has been% V6 u3 ]* ^* L$ Z) V3 E
driven primarily by purchasers who are buying homes as their principle
6 v t; M& `: Z/ S/ u4 U0 v3 X8 {6 mresidence, rather than for investment.
2 o7 ^9 o: f- q* F# c- c# P+ B8 {3 E
) j) T9 x. g4 g7 X' t# k. _+ K The vibrant Winnipeg housing market continued to show its strength as
& h( T: r: f. B o4 s. D r. ihouse prices rose during the third quarter. The booming local economy resulted* g7 _( C+ v" K% T4 C8 {
in a historically low unemployment rate, helping to bolster consumer; Z) L1 b% h) Z, F+ o( d) U5 D
confidence and Winnipeg's ranking as the city with the lowest capitalization2 h/ \0 u. Y# Y5 z
rate among the country's larger cities - helped to encourage buyers to enter* i5 r K! }' T Q
the market.# f! Y! H1 S( |0 q) P, J8 L: v
$ q# t$ V. N [6 j# f In Regina, the market experienced a slight seasonal slowdown through
! d) s2 U1 a5 G% P7 W% Z/ uJuly, as there were fewer purchasers in the market due to summer vacations. In: ^8 o" R3 f0 P& X0 a
August, activity resumed to the busy pace previously seen in the spring
" |9 ^( [8 T$ [0 `2 Jmonths, as the influx of purchasers made it more difficult to find a home due1 @: z- y3 S2 n5 f& Q' E; a) R* V. A
to the shortage of available inventory.5 K2 _& j9 N5 n3 s: [+ Q
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Activity in Saskatoon remained brisk as the market maintained its8 E A! X4 _/ J0 ~" K, A: \
momentum from the busy spring sales period. The economy in Saskatoon remains: t6 a6 h. w+ E! ?+ b0 w' k
vibrant, as employment opportunities are abundant with many businesses9 z0 o, Q8 p% `
struggling to make hires and having to recruit outside the province.
5 U# v/ v% _1 Q! B9 @5 ?& K/ v0 m' J) D& m) R% q( X: z
Calgary's housing market recorded blazing average house price increases
! i; P: u& ^0 G- ^, j& x! `; Xin the third quarter, in all surveyed categories. The burgeoning economy, low2 `7 u! u2 M4 |3 ^/ T; H& C. q/ ^! Q2 x3 a
unemployment rates and low inventory levels remained the leading factors that& m0 o1 e+ X8 s, a: [& s
pressured Calgary's house prices upwards. However, regardless of the soaring3 P2 ~4 r* N- N
prices that characterized the market - even during the typically slower summer4 p$ _" v4 I, ^
season - it is expected that activity will become slightly more balanced, as
1 r! U8 m- Q# T# Pbuyers are becoming more reluctant to participate in the frenetic activity.8 E: X) }: I9 P1 t% j
9 `0 M( ]9 N. g. @: J r* m: d
Edmonton's booming local economy continued to thrive in the third quarter
3 ]* `5 p$ Q. V+ pas activity in the oil sands north of the city continued to flourish. Edmonton2 k8 h- q( B; T
remained the hub of activity for those coming to work in the oil industry,# C7 T0 s# v' M
maintaining tight inventory levels across the city, resulting in prices
, K0 ?; S% g, Q1 _1 Dincreasing at record levels. However, as inventory levels continued to improve. o2 ]' T, f* ^9 {- R# d
in the third quarter the rate of price appreciation should moderate slightly; X; v' L. l& m9 J9 i: `' a
towards the end of 2006. ( E. @) q/ W# p) S
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While Vancouver has seen a slight reprieve from the severe shortage of' o: n& {. Z* x
inventory that had previously characterized the market, supply is still unable* Y1 v+ C- E( u3 u: T: N$ a2 p( x+ h
to meet demand, driving house prices upwards. Vancouver has a very diverse
5 U$ x2 c( r2 T8 K+ S$ H! agroup of active buyers - from first-time home buyers to baby-boomers to( k+ J& f J0 I Z0 ~' b
foreign investors - all of whom fuel the demand for houses, placing added( Q' b @5 Q5 p
pressure on tight inventory levels.
; s5 }* t# D/ K
. T4 U8 O' W2 @0 Z Victoria's market is vibrant and supported by strong economic1 y: _& Z. s( F
fundamentals, fuelled by a booming tech sector and a migration of young people
1 t* i. i7 k N Z' v3 Xinto the city that has continued to support the area's house price increases;
) W/ M$ H8 a, P6 V2 swhile increased inventory levels have afforded buyers more time when searching
) ^+ @4 \) }' r) w; V+ F( Z& C0 lfor a home, helping to normalize the market's pace.
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<<+ I% e$ a/ ?6 V
Survey of Canadian Average House Prices in the Third Quarter 2006( ~3 K/ K! \6 ^' Y$ L( \
8 v9 Z! V4 p" y3 b; [ -------------------------------------------------------------------------
( n3 n, t' g; o6 l" B9 g' y Detached Bungalows Standard Two Storey1 @5 f) L& n, T5 z% D/ m- r- v
-------------------------------------------------------------------------5 A# K" F, o) b. X( ~
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3, D, t2 i1 U% M6 l! ?" z4 Q, v
Market Average Average % Change Average Average
; f( v; b7 r+ C1 j% M -------------------------------------------------------------------------& T' M4 M0 ^# y& x8 z2 X/ s
Halifax 186,333 173,333 7.5% 198,667 199,0008 T; i0 l7 f6 K; Q
-------------------------------------------------------------------------" i' b+ _- @7 f+ q
Charlottetown 145,000 141,000 2.8% 175,000 170,000
! T+ _( l$ U# Q9 n. y, s* q+ F -------------------------------------------------------------------------4 d+ v+ f A: [/ v; t$ ~
Moncton 135,000 127,000 6.3% 129,000 123,000
) |2 a! f; Q1 ]0 |+ a0 u -------------------------------------------------------------------------1 d- O. } |7 P
Saint John 141,200 142,900 -1.2% - -) }, B1 z9 \" o# a. Q4 w d' A9 _% W
-------------------------------------------------------------------------
# i) Q+ Z- y: ?% Q& Y0 }! K St. John's 143,667 142,667 0.7% 200,667 202,3339 Y3 i J4 L% M5 e% P5 O% N. \
-------------------------------------------------------------------------
7 o1 d. Q' J4 C3 n7 p+ W4 {+ }9 h7 A3 A Atlantic 150,240 145,380 3.3% 175,833 173,583
' \. A a5 h" i4 {9 z -------------------------------------------------------------------------0 F* B. A# e1 h1 h5 Q1 p* U+ X7 {
Montreal 213,691 203,500 5.0% 321,141 316,185
, s5 Z+ N! L* ^9 }# \+ _" h! s -------------------------------------------------------------------------
* g! v- p6 p$ H+ d3 G2 J Ottawa 290,083 278,417 4.2% 285,667 273,250
+ s e" ]/ G, U" t4 R+ G# [9 W -------------------------------------------------------------------------( ]( K3 U! c7 } P* H" o. }- z% a
Toronto 373,368 355,882 4.9% 481,523 474,766
9 D% p4 D" c) l$ L; O -------------------------------------------------------------------------
- ^7 x0 N2 E x ^ Winnipeg 181,579 159,860 13.6% 202,337 180,707
: }' x! R. L; W& Z, ^& t -------------------------------------------------------------------------
5 ~, t$ Z% a6 m2 M Saskatchewan 170,667 156,083 9.3% 182,600 166,500
. V; V" \2 q3 D+ ^7 P8 { -------------------------------------------------------------------------! s/ ]: E! G4 u( @* n; J
Calgary 395,067 252,411 56.5% 405,778 264,389. x" U& K" }, o! M3 p$ t Q3 Y7 I, o
-------------------------------------------------------------------------
5 n# D5 D' T3 Y5 I Edmonton 286,857 194,857 47.2% 316,429 206,714
h7 b9 m3 m8 y+ ]9 `+ k$ K -------------------------------------------------------------------------
( r: x8 ~! w! D3 S1 I6 g Vancouver 704,250 601,000 17.2% 794,000 697,500 n, X5 u& d' v; N9 `
-------------------------------------------------------------------------5 _6 ? ]/ C, q4 g* w1 R
Victoria 375,000 348,000 7.8% 403,000 391,000
( T; Q+ R' D- ~8 m+ [1 h -------------------------------------------------------------------------# L- V9 O! Q. k. H, \; X
National 300,365 258,202 16.3% 365,380 322,860
% z; C2 ^# h& G6 h0 Y+ w8 J5 E -------------------------------------------------------------------------, K' H* K3 p3 Z/ y- _ Y* o4 e
# s* @) F$ Y, U- |0 y
-------------------------------------------------------------
! b. H: n2 v, c% F& A+ m8 k5 d* _& X Standard Condominium! O0 s8 g9 M+ c* w+ _
-------------------------------------------------------------
: S- \6 S! Y0 Y- E" T) V 2-Storey 2006 Q3 2005 Q3 Condo
3 p4 ~ Q: {0 b: T9 u9 N Market % Change Average Average % Change8 f) w# E- d- a2 i0 u4 T; ]2 b
-------------------------------------------------------------
& Z/ \/ v/ C( g+ y Halifax -0.2% 142,000 103,000 37.9% c+ @8 z" i, }% {! z1 n. A
-------------------------------------------------------------
. t1 I {4 l+ Z3 n! H% N Charlottetown 2.9% 98,000 98,000 0.0%
5 B# f3 \5 x" E1 } -------------------------------------------------------------- {5 ? y' `. {6 Y$ f
Moncton 4.9% - - N/A
6 W' A& D5 t& H: U3 h -------------------------------------------------------------$ G& b( i4 r4 L- }! }
Saint John N/A - - N/A
; q! l9 j0 t, G -------------------------------------------------------------
{4 p4 `9 V* w1 D9 x& ^' Q4 N1 D) s0 W St. John's -0.8% 146,333 145,667 0.5%( d6 h6 s; R# ?* ?: \7 I) g
-------------------------------------------------------------# f9 T% ?0 G0 t4 F* A5 P: T- [( X
Atlantic 1.3% 128,778 115,556 11.4%
! W n6 F, G, j- W; Z -------------------------------------------------------------) |) e& F0 y; D, o# ]* I
Montreal 1.6% 193,190 188,016 2.8%
c" c8 j# [0 d% I: Z- j3 F -------------------------------------------------------------' E* X* Q, u2 j+ G
Ottawa 4.5% 181,083 172,250 5.1%' n6 m* B9 D5 l( R* @8 Y
-------------------------------------------------------------
1 h/ T- m" T+ W; J% F+ x Toronto 1.4% 252,088 242,918 3.8%; k; d3 O/ {9 h" F5 Q2 j, h2 C
-------------------------------------------------------------+ u( ` F8 F/ C4 `3 J
Winnipeg 12.0% 105,648 96,008 10.0%
# t2 C& R8 b# Y3 j k$ o4 H. x! R -------------------------------------------------------------
4 h l3 s) a0 J6 h, ?9 P Saskatchewan 9.7% 106,250 101,000 5.2%7 Y+ l) P S1 r( z# {7 u
-------------------------------------------------------------' g- c# `+ p$ q1 ] \
Calgary 53.5% 245,844 153,867 59.8%
5 ~# h" L" \% P -------------------------------------------------------------
$ U3 M0 \, A; ~7 n9 U, g Edmonton 53.1% 200,433 131,500 52.4%
. B! r$ f' x" k( q* E -------------------------------------------------------------
8 `2 p+ |, F! j8 |6 y Vancouver 13.8% 366,250 323,250 13.3%/ Q# o* T) E1 L. T! u) X
-------------------------------------------------------------
* S; d8 d4 h" P- ^( E) X9 w Victoria 3.1% 229,000 220,000 4.1%
. g. E8 u% ?4 h$ C -------------------------------------------------------------' W7 o. s( W- m- W0 b8 ?; |( n
National 13.2% 211,562 185,296 14.2%& \/ s( s7 l4 I8 q. D1 ?3 g
-------------------------------------------------------------
* @% X C1 A3 p# p* c >>2 X! x6 ?/ u8 ?4 C, b; {6 G' I
0 w& `2 r- @+ F: r! o& z Z. d
Average house prices are based on an average of all sub-markets examined
+ N6 Z4 _* F9 p* C8 L( |in the area, except for the smaller markets of Charlottetown, Moncton, Saint+ E2 n' q7 S2 @+ I+ l T
John and Victoria.! @& B# K" N7 K
" I: m% k2 I, S6 e
The Royal LePage Survey of Canadian House Prices is the largest, most1 E' J+ G* e2 O0 ?) ]. ^) ]
comprehensive study of its kind in Canada, with information on seven types of& f# b* L, U i( q+ F; B
housing in over 250 neighbourhoods from coast to coast. This release. o% I7 @: V) F$ \: B2 W' ~% l
references an abbreviated version of the survey, which highlights house price3 R9 Q4 m; n4 q% j5 P
trends for the three most common types of housing in Canada in 80 communities3 ^3 o; S: O& ?: x4 H
across the country. A complete database of past and present surveys is8 r9 K1 N! G% B" m3 |6 D
available on the Royal LePage Web site at www.royallepage.ca, and current& q9 E* y* B3 G" m" `' Z
figures will be updated following the end of the third quarter. A printable; v# r6 u# e6 ^
version of the third quarter 2006 survey will be available online on J8 N% L' {7 K% A# L
November 15, 2006.; z5 S- M7 k7 w$ K; V0 m* i
Housing values in the Royal LePage Survey are Royal LePage opinions of( ?' F5 J0 l) B: Z( N* {6 [& ?
fair market value in each location, based on local data and market knowledge
& N$ g; D/ G3 h- O8 o6 J Kprovided by Royal LePage residential real estate experts. Historical data is6 x3 j& x# B0 B" x9 o5 r
available for some areas back to the early 1970s. |
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