Real Estate Market Residential real estate markets across Canada post solid gains over past decade, says RE/MAX Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada, according to a report released by RE/MAX.
RE/MAX Decade in Review 1997 - 2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into home ownership. 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 jump starting 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. Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade, followed by St. John's at 106 per cent, Kelowna at 84 per cent, and Saint John at 77 per cent. Most markets (12 of the 19 surveyed) reported increases between 40 and 60 per cent. Average price has also seen substantial escalation over the 10-year period, with posted gains ranging from a low of 54.4 per cent in London-St.Thomas to a high of 203 per cent in Edmonton.
Appreciation in Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent. In 2006, home ownership 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.
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. RE/MAX of Western Canada (1998) Inc.
Decade in Review issued February 21, 2008.

Nanaimo real estate blog

(MLS®) annual sales summary data released by the Vancouver Island Real Estate Board (VIREB) for February 2008, shows unit sales are down 12 percent while the average sale price increased 11 percent.

The average sale price across the VIREB region for February 2008 was $346,648. This is an 11 per cent increase from the $313,207 posted at the end of February 2007.

President Subhadra Ghose says the volume of listings continues to grow. "We are heading into the spring season, which is a traditionally busy time. As a result we are seeing an increase in listings and we're expecting a more balanced market going into the rest of 2008."

Unit sales volume at the end of February 2008 was down 12 per cent from February 2007. For the period from the end of February 2007 to February 2008, average sale prices across five out of VIREB's six zones increased: Campbell River increased 16 per cent (to $310,722), the Comox Valley was up 7 per cent (at $332,845), Nanaimo is up 16 per cent (to $370,863), Parksville/Qualicum grew 10 per cent (to $416,460), Port Alberni declined 3 per cent (to $221,578) and the Cowichan Valley increased 12 per cent (to $377,233).

Ghose is cautiously optimistic about the market. "I think we will be seeing single digit increases throughout the rest of 2008. Consumer confidence is strong and interest rates remain low," she says.

"Our prices continue to be more affordable than Victoria and Vancouver. As always proper pricing continues to be key in this marketplace. As a member of their local real estate board, REALTORS ® have their finger on the pulse of the housing market. Consumers should contact their REALTOR ® if they are considering buying or selling a home."

VIREB represents approximately 1,185 licensed REALTOR® members in more than 85 member offices on Vancouver Island (north of Victoria).

VIREB cautions that average price information can be useful in establishing trends over time, but does not indicate the actual prices in centers comprised of widely divergent neighborhoods or account for price differential between geographic areas.

REALTOR® is a trademark identifying real estate professionals who are members of the Canadian Real Estate Association (CREA). REALTORS® subscribe to a Code of Ethics and Standards of Business Practices as set out by CREA. MLS® is a cooperative marketing system used by Canada's real estate boards.

For more information, please contact:

Drew Harris, Communications, 250-390-4212

Nanaimo real estate blog

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OTTAWA, Ontario, March 04, 2008 - The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of one percentage point to 3 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 3 3/4 per cent.

Information received since the January Monetary Policy Report Update (MPRU) indicates that economic growth in Canada through the four quarters of 2007 was broadly in line with expectations. Domestic demand has remained buoyant, as rising commodity prices and high employment have continued to support income growth. Canada's net exports weakened further in the fourth quarter, reflecting the slowing U.S. economy and the impact of the past appreciation of the Canadian dollar. Overall, the Canadian economy remained above its production capacity at year-end. Core and total CPI inflation - at 1.4 per cent and 2.2 per cent, respectively, in January - have also been consistent with the Bank's expectations.

At the same time, there are clear signs that the U.S. economy is likely to experience a deeper and more prolonged slowdown than had been projected in January. This stems from further weakening in the residential housing market, which is adversely affecting other sectors of the U.S. economy and contributing to further tightening in credit conditions. The deterioration in economic and financial conditions in the United States can be expected to have significant spillover effects on the global economy. These developments suggest that important downside risks to Canada's economic outlook that were identified in the MPRU are materializing and, in some respects, intensifying.

The Bank now judges that the balance of risks around its January projection for inflation has clearly shifted to the downside, and, as a result, the Bank is lowering the target for the overnight rate. Further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance and to achieve the 2 per cent inflation target over the medium term.

The Bank will publish a new projection for the economy and inflation, including risks to the projection, in the Monetary Policy Report on 24 April 2008.

Information note:

The Bank of Canada's next scheduled date for announcing the overnight rate target is 22 April 2008.

News source: Bank of Canada

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