1997 - 2007 A Decade In Review

Canadian Real Estate Review

1997 - 2007 A Decade In Review

Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fuelled one of the best decades on record for residential real estate in Canada, according to a report released by RE/MAX. Download Full Report

The RE/MAX Decade in Review 1997 - 2007 Found that

• Major housing centres across the country experienced strong consecutive growth between 1997 and 2007.

  In 2006, homeownership rates in the country were the highest on record at 68.4 per cent. Population growth has contributed to heated market conditions – especially in Calgary (+31.4 per cent), Edmonton (+20 per cent), Toronto (+20 per cent), and Vancouver (+15 per cent) where percentage increases have hovered in the double-digit range. Overall, Canada’s population rose to almost 33 million in the 2006 census, up approximately 10 per cent from 1996 figures.

• Average price spiralled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership.
  
• Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.
  
• Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year.
  
• Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007.
  
• Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period.
  
• Immigration and in-migration have played a serious role in jumpstarting residential housing markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade. At first, there was an influx of American buyers, especially in Canada’s coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback. Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by international standards. In recent years, there have been a growing number of purchasers from Mainland China.
  
• From a global perspective, there’s no question that Canadian real estate brings good value to the table.
  
• The non-cyclical nature of the decade comes as some surprise.

  Never before have we seen such a continuous run up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation.

• Robust economic performance in Western Canada has also drawn job seekers from across the country, looking to capitalize on employment opportunities.
  
• As demand for housing increased across the country, the supply of homes listed for sale began to contract.

  Multiple offers were commonplace in many areas, some with sales-to-listings ratios as tight as 80 to 90 per cent. Nationally, 1997 marked the first year since 1988 that the sales-to-listings ratio hit 50 per cent. The sales-to-listings ratio would remain above 60 per cent from 2001 onward – rising to as high as 68 per cent in 2002.

• The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border.

Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

Sales Representative
RE/MAX Scugog Realty Ltd. Brokerage 905-852-6143
Each office is independently owned and operated