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Canada's housing market both vigorous and stable
4 c& v, t- u. ^. b
9 n% W1 ^+ ?' G- Country's market poised to show growth throughout 2006 -9 E1 H5 H4 D: r; U) ~
& i4 |8 b$ |! h. ?6 ~" ] TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market1 k" m/ ?* G% w# ]# M. C3 t
exhibited moderate price increases and stable unit sales during the third
/ k' a0 S& e2 b, M/ ^quarter. Wide regional variances continued to be the dominant characteristic" w1 P* `8 K. ^/ g5 t( g8 K9 P
in the market, exemplified by frenzied levels of activity and double digit; {9 M2 O! a m3 @
price gains observed in the energy and commodity rich Western provinces, and
* o. G, }0 t4 \0 y$ M" smore reasonable sales volumes and moderate price appreciation in Ontario,
$ T$ l U$ v& M: H, g7 k% jQuebec and Atlantic Canada, according to a report released today by Royal T" g& f7 z5 x$ k! s$ f
LePage Real Estate Services.5 z; E4 }! z3 w- f
7 m2 D9 U/ F3 V% h5 v Nationally, market trends established through the first three quarters5 u2 n! ?! [6 K) w# k6 G
are forecast to continue for the remainder of the year. Robust economic p& t" `+ M% W, ?
conditions, low unemployment rates, modestly growing salaries and wages, and& L1 B4 O9 q2 `7 ?( L! z! a% B8 V5 _
sound consumer confidence contributed to the overall strength of the: f: G" X( |5 u& T4 T& c, z
residential real estate sector.
2 }* a+ r! o0 U' j. t d, H
) Q0 j8 F" h; K1 B Of the housing types surveyed, the highest average price appreciation% R: L, o5 F: ?. i6 O& N, y
occurred in detached bungalows, which rose to $300,365 (+16.3%): ^$ g/ @6 y: j0 E Z
year-over-year, followed by standard condominiums, which rose to $211,562
0 Y& b9 K# H U; c' F4 Q- D(+14.2%), and standard two-storey properties, which increased to $365,380
0 T8 A, A8 i2 [0 X/ Y/ A2 W1 B(+13.2%).2 @. C9 B5 f" A
- x$ O8 N) f/ }8 L3 f- U. K "Canada's sturdy housing market continued to demonstrate steady growth" H' b4 j Y5 u9 v' {$ k
during the third quarter. For all but the west, we have moved on from the
3 P0 y7 |0 _* j8 p4 `frenzied expansion that characterized the first half of this decade, and are* N$ M" y2 K# e: X! b/ V
poised to show continued growth at a more moderate pace," said Phil Soper,+ n3 g* D% T9 |: I! Q
president and chief executive officer, Royal LePage Real Estate Services.% m/ q9 B# S. `9 Y" B. `
"Gone is the sellers' market that we have lived with for some years. We
1 b' _( T9 O, S" Ywelcome the more reliable conditions that are characteristic of a healthy/ M( L( u/ U5 n3 H4 b, L
balanced market."% B( s( O1 S2 { x' |6 l: |
: a/ T4 r2 b3 [7 y3 Y1 N: u- R6 h Despite the double-digit rise in average national house prices," t5 i* S+ S: m" o4 H) }
considerable regional variances were exhibited again this quarter. The shift
% @- i- a) T( Y8 oto balanced market conditions, which began in late 2005, has continued; b: H8 v1 v) l2 \3 Z# ~9 z* }6 T& _
throughout most of the Central and Eastern regions of the country. In the core. o$ L5 I- b2 q( K" I3 B5 L
energy producing western provinces, the combination of very high in-migration,, T" H( u: W" Y, F) t2 p3 r
manageable affordability, and a shortage of inventory has driven record" D6 R8 ]/ ]* B7 a$ ]( h
breaking price appreciations.
! | Z- f1 L. V! J& u
0 y1 f5 H# P5 q1 e; c! L, u* F Echoing the second quarter and supported by Alberta's rapidly expanding" j* `9 p! z0 g. [" o1 r
economy, Calgary and Edmonton led the charge of Canadian cities with the
% _! e& F2 o$ I7 u2 W1 r4 ]0 Slargest house price appreciation in all housing types surveyed.
/ m+ A3 z6 O- U% V/ p) g( f8 f9 ]# K% r6 n% P% {
In Ottawa and Toronto, growth remained steady, supported by solid
4 G$ U3 Z! X: N# @: E+ ]& Q) z5 x' Oeconomic fundamentals, an increase in available inventory and strong consumer
1 I; s, h$ s: u; V: wconfidence. While the pace of price appreciation in Ontario leveled off
$ g, J; W% e9 j' xslightly, the province's real estate market remains poised for modest growth.
0 x1 C9 Q; q% |, y6 h, pIn Atlantic Canada, new housing and condominium construction offered buyers8 }! E' {/ g+ {
greater selection at more competitive prices, resulting in a slower rate of
+ X, C# p& W# H4 C, u; V$ {price appreciation when compared with 2005.8 e3 i O, p4 I. ]5 ?
7 m- x8 P R1 w" s' T4 J While the pace of growth in Canada has slowed, the domestic housing+ b8 O2 i/ x' a. \9 j
market is expected to outperform the American market. The economic and1 [. l" R1 m" e1 X+ w
financial fundamentals driving the residential real estate sector in Canada5 v$ S+ o6 `; u/ v
are markedly different than those found in the United States.
# m/ i4 z- ?2 ^2 }- ^( z$ k9 |' D3 y0 C4 G* W0 L
Added Soper: "Canada's housing market is likely to outperform the$ y) K* s+ e0 F6 y4 \ ]
American market through 2007. A number of factors are working in Canada's
+ R W9 |6 U" C/ k7 mfavour, including healthy personal and governmental debt levels, the
$ {4 e" P9 [3 A drelatively modest rise in interest rates in our country, and general
+ x( h% N* n' n b( C+ ]+ Waffordability in our major cities. In addition, Americans are now seeing the$ u9 j+ ?, D- D) Y1 S& e3 l" c
downside of a tax system that encourages maximum homeowner leverage, and- t- O8 T" `! {! U, M
aggressive financial products such as zero- and negative-amortization# |" x# x$ P% A6 U, c- e
mortgages that work only in a high price growth environment."
' j5 E6 [. Q4 D/ U7 K# `7 D
( i q# \7 `4 B p0 U; \/ W" C) ?# {7 {$ u <<
A3 b* Z! K$ A' r6 U REGIONAL SUMMARIES
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. ]0 H |' U7 Q" E7 K) A
Balanced conditions continued to characterize the housing market in
0 s# p" r$ ]7 T: wHalifax, as significantly higher inventory levels helped to moderate the rate6 ]2 G/ ]1 {7 A! S$ s5 j
of price appreciation. Buyers were increasingly choosy, taking more time; ]: t. }; Z" e9 J7 p& u' H
looking for newer, low-maintenance properties that were not in need of
$ u: H: _5 c& ^' |9 drenovations.1 s& | j( A$ G$ X5 p2 v
# Z- o: Y/ T6 D- a: L) M- z
The housing market in Moncton remained healthy and strong as a slight
$ i) Y1 h) ?2 }8 Yincrease in inventory helped to moderate the rate of price appreciation. y9 Q( H" r4 E9 u1 {2 r
compared to the same period in 2005. Activity was brisk throughout August and
2 Z- c1 F! }* G3 m" Y! nSeptember and is expected to remain this way through the fourth quarter.
& e; ]3 X$ N; R8 Y, \' o# k6 \
& H+ N0 D( y7 ?# @/ Y, D The housing market in Saint John underwent its traditional summer3 ]+ x1 d8 S. Q6 l( l
slowdown in the third quarter, with activity picking up towards the end of the) ^4 y% t( O$ X
quarter. The local economy continued to thrive, as construction on a new! d: C, u5 E6 B# j0 I
600,000 square-foot shopping area has begun, bringing several new box stores
5 Z$ K# E% ], e v2 dto the area. Buyers have begun seeking less expensive fixtures for their homes
. K2 G$ r$ I: s9 G, Aand are instead opting for more affordable housing options.9 |. {0 g1 w/ ~
2 p; g. e' ^9 G* U L; j$ n0 E% y! o
In Charlottetown, the housing market started to move towards balanced
. L& P# _3 B* E( o, X9 g9 N$ A A6 jconditions, as some sellers had to begin to lower the asking prices on their8 ^# u- J; ~2 }
homes to make them more competitive. Activity from out-of-town and US buyers- M1 d& B6 ? i& [) q$ b
was down slightly compared to 2005, likely attributable to the strong Canadian$ u9 Z% P5 ?: y: G; g9 n" q; a8 }
dollar. Inventory levels began to creep up in the third quarter, providing$ s7 v+ Q- j) R/ t
buyers with more options when looking for a home.1 P0 N% Y3 p, t3 d) D& `
. T9 E. a, J# D( ] d* ]
Activity in St. John's slowed slightly in the third quarter, particularly! L8 C$ y3 t1 E' z' H8 p
among higher-priced properties, where there was a slight over-supply of homes5 T, v% D# N- m7 P3 |
priced over $200,000. Listing periods have increased when compared with 2005,
: S9 J# w# Y% W, r8 m6 ~7 Oas some of the pent-up demand that had characterized the market over the last |# w: e; n; X
few years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house
; q, _- \; @4 g( L2 cprices, due to a slight seasonal slowdown in the third quarter as inventory) V" K5 N( ?2 v# W8 n0 ?( {, t
levels rose. Part of this can be attributed to the fact that many renting
7 _5 E+ d# ~% M" S; sfirst-time buyers were motivated to close on the purchase of a home by July 1,
' k; V) ], R% B, `1 d$ Hwhen rental leases expire in Quebec. Once this date has passed some of the- W; c# ~7 G$ T: R7 L
pressure is taken off the market, allowing buyers to visit more homes before* X `' C! r! Q1 G1 J9 H# {* H
making a purchase.
9 Q: B/ A3 {; ]
) A* ^4 o3 K8 Z' Z/ j: B) x) C Ottawa held its position as one of the country's most stable housing
0 x1 \+ R; X9 U2 |7 W4 `) Qmarkets in the third quarter, reinforced by a vibrant local economy and strong) e9 i' m. v# I# N5 v
confidence, resulting in modest increases in average house prices. The city5 f9 c# g: l3 |
centre remained a bright spot in Ottawa, with homes in this area attracting% A) Y9 w6 W v! O4 j
attention due to their convenient location and proximity to downtown
% S4 d3 ? c [7 b5 ramenities.
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The housing market in Toronto sustained healthy activity levels
! c9 ?3 e J5 Z0 y$ I: F {throughout the third quarter, as a strong economy helped to maintain demand, Q1 W+ i* M3 @* W
across the city, causing average house prices to rise moderately. Toronto has
; n% a1 C' Z4 @9 P; c& Vcontinued to experience modest growth in average house prices, and has been% b7 b8 ~9 n: z$ h. }) T n
driven primarily by purchasers who are buying homes as their principle
2 G9 t' Y1 }1 J' @* g6 D% h" oresidence, rather than for investment.
9 y! M5 M, |/ W; i; H+ | h) t
1 u& H) Z W3 h4 t The vibrant Winnipeg housing market continued to show its strength as+ ^ Z0 E o( z9 \5 J2 U9 q, j% V
house prices rose during the third quarter. The booming local economy resulted
( e0 @% n' P& i- X! cin a historically low unemployment rate, helping to bolster consumer
5 n8 x' o9 |# F( i5 Tconfidence and Winnipeg's ranking as the city with the lowest capitalization! w9 N7 I {6 Y+ v
rate among the country's larger cities - helped to encourage buyers to enter w* i5 R% T, r, V
the market., Y9 |+ F, \! q* ]* h& {+ d
: ~$ k3 t: ~# `0 e6 m
In Regina, the market experienced a slight seasonal slowdown through
. W4 v9 j& X% g1 u# W' X& G! cJuly, as there were fewer purchasers in the market due to summer vacations. In* y! l) l3 r% q( O" X
August, activity resumed to the busy pace previously seen in the spring+ H( R0 j( B5 g- f
months, as the influx of purchasers made it more difficult to find a home due" b5 m/ n" V8 a* j
to the shortage of available inventory.
- M. z% Y. `! F n4 W' b9 h% M7 g$ x6 {' i. x+ H* ?) \4 F
Activity in Saskatoon remained brisk as the market maintained its3 h4 G0 I5 a5 s2 q! t& ?) g6 y
momentum from the busy spring sales period. The economy in Saskatoon remains8 p+ K$ `9 a* g) Z
vibrant, as employment opportunities are abundant with many businesses4 }) @; B% I' o- Y( e
struggling to make hires and having to recruit outside the province.9 n6 [4 W8 M+ I/ k0 o: K) R5 q
3 a& L6 ]! Q+ g! _; D" a5 p8 k
Calgary's housing market recorded blazing average house price increases
" n3 e: [2 e) B- ?. |# ?! pin the third quarter, in all surveyed categories. The burgeoning economy, low
% Q" ?0 ~9 x6 y Yunemployment rates and low inventory levels remained the leading factors that0 \* \4 }/ J2 h4 K0 z# h
pressured Calgary's house prices upwards. However, regardless of the soaring
* C+ H+ v: K, b8 Aprices that characterized the market - even during the typically slower summer+ c: O5 _1 H; S, B/ K) K
season - it is expected that activity will become slightly more balanced, as0 Q; M2 C }" M5 t+ f6 m5 U
buyers are becoming more reluctant to participate in the frenetic activity.
+ v0 h) f, G' }: t }5 j; [" z* H, S! G: ]
Edmonton's booming local economy continued to thrive in the third quarter8 g1 D( \: J" y4 H
as activity in the oil sands north of the city continued to flourish. Edmonton
, z$ Y" O5 \! W2 `remained the hub of activity for those coming to work in the oil industry,
. N: Z% y& |8 g2 bmaintaining tight inventory levels across the city, resulting in prices
: V* M1 L' Q9 N l- I9 lincreasing at record levels. However, as inventory levels continued to improve
0 W" X x& `2 ?# u* O4 u: uin the third quarter the rate of price appreciation should moderate slightly
: ~& F" A0 [ ^7 u" h5 otowards the end of 2006.
1 |5 ? P3 A" p' R% D9 j+ ?# c! R! L3 r
While Vancouver has seen a slight reprieve from the severe shortage of
- C d( O" j8 M3 Dinventory that had previously characterized the market, supply is still unable
; w7 G; o* P' g& bto meet demand, driving house prices upwards. Vancouver has a very diverse
. ~$ r) P6 O" c3 B! x: dgroup of active buyers - from first-time home buyers to baby-boomers to
6 Y3 ~0 @4 X+ J5 eforeign investors - all of whom fuel the demand for houses, placing added& ?0 c4 d; k, _4 a- ~' K
pressure on tight inventory levels.
) @$ L& N% K* g7 F$ N+ ]7 O. X9 b+ G! l) | R8 k
Victoria's market is vibrant and supported by strong economic
9 f8 s3 p* T! v. Lfundamentals, fuelled by a booming tech sector and a migration of young people
' S' J9 a0 `# z8 O8 winto the city that has continued to support the area's house price increases;7 f: d7 [" w+ B; `- @' {( J
while increased inventory levels have afforded buyers more time when searching) w: O" [" h$ k
for a home, helping to normalize the market's pace.! e- z& J0 [0 e0 l% T
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<<) X' H9 H# e3 j* Z5 ^( r9 f& O
Survey of Canadian Average House Prices in the Third Quarter 2006
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-------------------------------------------------------------------------2 @" V6 K3 d e! J
Detached Bungalows Standard Two Storey p+ k. \1 a* t. f4 Y
-------------------------------------------------------------------------! E* k$ F Q6 z: d4 F7 f3 M( i
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q33 e- }: D) P% H: h: I' e1 I9 b4 L
Market Average Average % Change Average Average
8 s. ~2 U0 Y; }0 C* b -------------------------------------------------------------------------$ `: V/ j% ^- F2 m" K: Q
Halifax 186,333 173,333 7.5% 198,667 199,000/ r- S* a# ?3 h0 q9 ^6 L# }, _
-------------------------------------------------------------------------1 z+ }. e$ x8 @+ [3 G! n
Charlottetown 145,000 141,000 2.8% 175,000 170,000
9 K d2 r8 P' b$ g1 _1 y0 U -------------------------------------------------------------------------
+ J: q R6 s/ ^" O- h Moncton 135,000 127,000 6.3% 129,000 123,000& J# L. j& a2 K- w' \" n9 P+ I2 G/ z
-------------------------------------------------------------------------4 l _5 `- n3 e: i: h2 D a9 Y0 C
Saint John 141,200 142,900 -1.2% - -: P! z/ r8 z1 N3 i! R- h5 J3 d" K- J( y
-------------------------------------------------------------------------9 z. |8 M" S- G
St. John's 143,667 142,667 0.7% 200,667 202,3333 ~1 b2 b R3 m9 s+ Q L0 n( ~6 a
-------------------------------------------------------------------------) S3 q- S+ E; t( h& g
Atlantic 150,240 145,380 3.3% 175,833 173,583
' ]% Y8 Y- b3 I3 Q9 X5 N -------------------------------------------------------------------------% {3 I; l* G% |5 L
Montreal 213,691 203,500 5.0% 321,141 316,185
+ x6 b$ Q$ ~) @3 p0 ?% J1 b -------------------------------------------------------------------------
1 x! H/ K! L% G/ [ Ottawa 290,083 278,417 4.2% 285,667 273,250
" L2 f. o u3 y, O+ q; b -------------------------------------------------------------------------( W/ l4 |* f+ w$ F7 u3 `
Toronto 373,368 355,882 4.9% 481,523 474,766
' F$ J% d( }7 n4 M! S/ ^3 w -------------------------------------------------------------------------- I. B' B1 q5 `( D' \1 b
Winnipeg 181,579 159,860 13.6% 202,337 180,707
/ A5 `$ x5 p/ y- H -------------------------------------------------------------------------
9 m; \# E X1 K1 Q# d! s* o+ Q Saskatchewan 170,667 156,083 9.3% 182,600 166,500
; J' r4 ]$ D, ~7 ?) i, S4 t -------------------------------------------------------------------------
% W- w* s: W8 B5 ?6 \6 R Calgary 395,067 252,411 56.5% 405,778 264,3895 }+ h5 ~% M3 h7 T+ g
-------------------------------------------------------------------------
" n! f$ n8 T; | Edmonton 286,857 194,857 47.2% 316,429 206,714% I# j/ I/ v& {' I
-------------------------------------------------------------------------
' ?, K0 s' F$ C* U Vancouver 704,250 601,000 17.2% 794,000 697,500) t( P: N! m% S) o5 R6 @
-------------------------------------------------------------------------! h; m& P- A' v9 O- l6 n6 O
Victoria 375,000 348,000 7.8% 403,000 391,000- F! O1 K' p# i; v, \: n
-------------------------------------------------------------------------
/ s9 i" [+ l4 G% @/ V National 300,365 258,202 16.3% 365,380 322,860
/ O) M: M8 Z+ A) m9 c' \ -------------------------------------------------------------------------
9 y# ?4 H: U: S7 ?& ^) |6 E+ V
( n# i+ C% _) \% D4 h1 [4 s -------------------------------------------------------------
: |8 f0 F! P2 j) r2 U; m: u- K Standard Condominium! o8 @/ a8 j! B! b
-------------------------------------------------------------
* K; W8 E) E& z; V 2-Storey 2006 Q3 2005 Q3 Condo
! P+ Y; @, R" }5 Z& z* ~ Market % Change Average Average % Change0 m+ ]' R1 j& I' K; O
-------------------------------------------------------------$ t6 b! Y( X2 ^ O; c+ _" a( D
Halifax -0.2% 142,000 103,000 37.9%
+ v1 Z5 X4 ]: l! ? -------------------------------------------------------------
- n" v9 {+ m8 y2 o g Charlottetown 2.9% 98,000 98,000 0.0%
- A- X: q8 I o4 I6 g) l& e -------------------------------------------------------------6 e' G3 ?7 X; z4 f
Moncton 4.9% - - N/A
1 e& U; w } O* q# z4 c& J0 l8 F -------------------------------------------------------------
2 K: x/ c# \. N, {5 K) L6 j Saint John N/A - - N/A& R i( H: [, J+ F" Z
-------------------------------------------------------------
" N/ r4 v) p( ^' D8 u4 v St. John's -0.8% 146,333 145,667 0.5%; a/ l; M7 n* i
-------------------------------------------------------------" s0 d3 [+ {9 w2 }' Z) f0 y, l6 X
Atlantic 1.3% 128,778 115,556 11.4%) U" T# e% o# s& ]- T! V
-------------------------------------------------------------; w0 V* ~ ~8 y
Montreal 1.6% 193,190 188,016 2.8%
# M0 a( m/ p3 T$ ], i# L -------------------------------------------------------------
% Y2 m2 u4 r$ C& c4 k Ottawa 4.5% 181,083 172,250 5.1%
% C; _! e8 p2 a( w -------------------------------------------------------------' U( n t' ]+ m- e% q9 w
Toronto 1.4% 252,088 242,918 3.8%. m' `6 o/ I7 H0 B. W; B6 w7 _
-------------------------------------------------------------
/ d1 B- N. {7 p5 L6 y& u8 u Winnipeg 12.0% 105,648 96,008 10.0%
7 N/ ]* x- \( t5 {# }( l. r -------------------------------------------------------------
3 t' V( }8 k# O2 {6 U: B* p# S+ T Saskatchewan 9.7% 106,250 101,000 5.2%9 w, w4 S& o+ f* X; b& E
-------------------------------------------------------------8 j* S0 b8 D: X7 v/ K- ]# I2 m
Calgary 53.5% 245,844 153,867 59.8%
, @ J. P7 J3 ^* A -------------------------------------------------------------
8 H/ H1 r7 m; K) Z! Z8 Y. }& O- Z Edmonton 53.1% 200,433 131,500 52.4%3 T2 R; y Q. N) U
-------------------------------------------------------------
A8 \+ E9 ?/ [% k/ A- N Vancouver 13.8% 366,250 323,250 13.3%
/ P& ], ?! I8 F7 f3 s, g( R -------------------------------------------------------------
6 c) W8 i! I# g/ R# G Victoria 3.1% 229,000 220,000 4.1%6 k- H* I4 u5 E* W& h7 n- b
-------------------------------------------------------------
1 p& L7 a8 A8 Z7 }6 J. { National 13.2% 211,562 185,296 14.2%/ A; n( M4 @1 r1 Z4 r: U6 Q
-------------------------------------------------------------6 d+ m8 V( D- `! g
>>9 H9 p0 Y. t+ k& g% N
2 o! ]( Y" \' X% X* c Average house prices are based on an average of all sub-markets examined9 V7 z& U4 e ~9 y! w4 ?
in the area, except for the smaller markets of Charlottetown, Moncton, Saint. i. k6 {5 h' Z3 T% @2 O
John and Victoria.
9 f8 V% Q S+ |# O3 f4 V( q4 k9 ?) x6 }1 {( k% }; s$ t! C& X4 _: q* c, o! g
The Royal LePage Survey of Canadian House Prices is the largest, most; F& z8 L$ j$ p1 @1 B' H U3 y
comprehensive study of its kind in Canada, with information on seven types of
3 n+ j" {8 A- E2 r- ?; Nhousing in over 250 neighbourhoods from coast to coast. This release! o/ u/ \2 t" M' [5 N* T: j
references an abbreviated version of the survey, which highlights house price
. E; v K& Y$ n6 Y: p* ctrends for the three most common types of housing in Canada in 80 communities
) k6 D1 A3 l. X* \across the country. A complete database of past and present surveys is
: r3 e3 m5 N: z }, P( d/ kavailable on the Royal LePage Web site at www.royallepage.ca, and current
2 T" v7 \ i# ~6 k( d! Q9 G! Vfigures will be updated following the end of the third quarter. A printable
) p6 d8 d# @0 v, Xversion of the third quarter 2006 survey will be available online on) H! V, q" j; Q$ `) _- X$ T6 r
November 15, 2006.
3 z# n" s$ a2 t& Q ]1 J: R Housing values in the Royal LePage Survey are Royal LePage opinions of
4 _2 z' C% A. W) G: ?fair market value in each location, based on local data and market knowledge
' K0 a% O& S0 g$ K0 Pprovided by Royal LePage residential real estate experts. Historical data is
- W5 h9 X' F/ c1 k2 c& pavailable for some areas back to the early 1970s. |
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