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Canada's housing market both vigorous and stable
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2 H4 C8 N, _$ V1 M& `, x8 {- Country's market poised to show growth throughout 2006 -
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/ u2 j$ S" G% w: x4 p4 M$ ]7 p TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market" E: y2 ^9 Z+ J! j9 n
exhibited moderate price increases and stable unit sales during the third
5 p' ^. W! ^; ^' _, ?quarter. Wide regional variances continued to be the dominant characteristic
1 ]# P) g I8 l: `& |in the market, exemplified by frenzied levels of activity and double digit0 D4 F: _1 T. H- H# F9 h8 r& R
price gains observed in the energy and commodity rich Western provinces, and D5 Y2 |3 [& G# f
more reasonable sales volumes and moderate price appreciation in Ontario,
9 K% r. k1 V) `Quebec and Atlantic Canada, according to a report released today by Royal$ Q" M7 j" u, Y' G8 P/ i- o" }
LePage Real Estate Services.$ ?: W( w7 ^7 B- L
2 @3 w4 T Q2 h) U4 X+ J. h% l' M Nationally, market trends established through the first three quarters
: L3 k2 k. i2 I, c/ I2 |are forecast to continue for the remainder of the year. Robust economic! d* |! H1 q2 E5 D3 O2 h
conditions, low unemployment rates, modestly growing salaries and wages, and; x$ Q- a8 B4 u
sound consumer confidence contributed to the overall strength of the
7 t4 I: W3 p+ T9 j3 ]: {residential real estate sector.
$ E, @1 O$ Y8 k2 b# t; ~+ |8 F8 U8 n/ n6 ~! M- d$ i: D
Of the housing types surveyed, the highest average price appreciation
, v& h2 x2 S( \occurred in detached bungalows, which rose to $300,365 (+16.3%)' v" Y j$ n5 ~! t6 a7 o
year-over-year, followed by standard condominiums, which rose to $211,5627 f `. T6 o% M" E( v
(+14.2%), and standard two-storey properties, which increased to $365,380
& o6 h0 }) d& @. _(+13.2%).
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"Canada's sturdy housing market continued to demonstrate steady growth
9 g+ F p% U; N$ J/ F- C% hduring the third quarter. For all but the west, we have moved on from the
7 @ X. \5 M' w' c0 yfrenzied expansion that characterized the first half of this decade, and are
) w% L. z* E0 g& P- _6 U3 \6 i8 _poised to show continued growth at a more moderate pace," said Phil Soper,# \+ l C, @ g# E
president and chief executive officer, Royal LePage Real Estate Services.7 ~( T0 B- {5 K5 W% v
"Gone is the sellers' market that we have lived with for some years. We! [6 } ^5 l: @
welcome the more reliable conditions that are characteristic of a healthy
4 D% P+ D- I0 f8 \, tbalanced market."
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Despite the double-digit rise in average national house prices,
6 J' o) L0 |+ S7 E2 g8 Xconsiderable regional variances were exhibited again this quarter. The shift
' K1 n6 _% y' y6 m$ P; nto balanced market conditions, which began in late 2005, has continued
( `/ P9 a7 G* H. U) M: Qthroughout most of the Central and Eastern regions of the country. In the core; | w8 ]% J! }8 l5 e, t# r
energy producing western provinces, the combination of very high in-migration,
% H5 c5 T- k$ r0 C1 b7 e! [0 S4 @manageable affordability, and a shortage of inventory has driven record; x* O1 ]9 ]# g) |5 G% u6 d' s0 Q
breaking price appreciations.
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Echoing the second quarter and supported by Alberta's rapidly expanding
- v/ b; ^! K" O' b2 Teconomy, Calgary and Edmonton led the charge of Canadian cities with the
: r2 @- e5 _0 X! ]largest house price appreciation in all housing types surveyed.
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In Ottawa and Toronto, growth remained steady, supported by solid: o7 N& [" z+ h" O6 q/ Z
economic fundamentals, an increase in available inventory and strong consumer
& M g" p) r3 f! h6 ^/ gconfidence. While the pace of price appreciation in Ontario leveled off9 u1 I5 N3 E3 f- h" x2 x+ b" [
slightly, the province's real estate market remains poised for modest growth.$ B$ ~* z: x6 X+ P/ `0 H0 }
In Atlantic Canada, new housing and condominium construction offered buyers _6 p# t5 B% j9 z( z
greater selection at more competitive prices, resulting in a slower rate of3 Q9 ]6 ?) d0 W9 J# e6 c; V+ e
price appreciation when compared with 2005.3 @( c1 Z6 B+ s j7 ]7 r
/ ]1 W+ {: b+ }. ]0 f8 K" U8 m While the pace of growth in Canada has slowed, the domestic housing
5 a$ j$ ]/ k: O7 K# fmarket is expected to outperform the American market. The economic and5 E. R% [& ?7 L# T
financial fundamentals driving the residential real estate sector in Canada
; R" M" O2 c0 t5 V+ Q o0 B4 Sare markedly different than those found in the United States.: w' X \# v- I( E& ~
* u4 O, q: G+ j5 U) P N, Q( }
Added Soper: "Canada's housing market is likely to outperform the
4 J! r% P4 Q1 Q. Q& X) tAmerican market through 2007. A number of factors are working in Canada's
' P1 _8 |; y s$ x' g# b1 Yfavour, including healthy personal and governmental debt levels, the
7 @! R( g( W% _8 g" i- Rrelatively modest rise in interest rates in our country, and general
% e2 x% T0 O! v4 ]8 maffordability in our major cities. In addition, Americans are now seeing the5 M7 G5 k& m; v; d% b9 B
downside of a tax system that encourages maximum homeowner leverage, and
' b% w6 ~& l3 @, u9 faggressive financial products such as zero- and negative-amortization
1 T$ z$ d* b, `4 Gmortgages that work only in a high price growth environment.", V& Q3 p' b5 P$ }, e6 ]+ O
5 ?4 ~- {+ {; J' f$ s* O6 B# k <<
, K+ B4 c1 E( y REGIONAL SUMMARIES
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Balanced conditions continued to characterize the housing market in
* ^# e: m5 v( _9 V& H* y, [8 IHalifax, as significantly higher inventory levels helped to moderate the rate
, E& P8 Y i. ^* \6 kof price appreciation. Buyers were increasingly choosy, taking more time
; `8 c+ o& @/ @2 |7 nlooking for newer, low-maintenance properties that were not in need of9 H5 R2 |6 X/ \- b3 E
renovations.
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The housing market in Moncton remained healthy and strong as a slight' q# o0 O9 k- |2 Z
increase in inventory helped to moderate the rate of price appreciation/ d: G4 y) Q3 `2 ?( u
compared to the same period in 2005. Activity was brisk throughout August and1 g$ s5 x# `+ S+ i$ p
September and is expected to remain this way through the fourth quarter.- e5 D* I, `) k* O' O5 z
5 T1 w* S$ w% S8 a
The housing market in Saint John underwent its traditional summer
) D, A2 b& E8 c2 {' ]slowdown in the third quarter, with activity picking up towards the end of the# H. i i( U( j2 x/ m4 o9 h
quarter. The local economy continued to thrive, as construction on a new
, Z' R4 l% C1 Q" H- j' y600,000 square-foot shopping area has begun, bringing several new box stores7 S' h) f g: W& e+ B* a% P
to the area. Buyers have begun seeking less expensive fixtures for their homes& N8 O N3 i: R: k; O
and are instead opting for more affordable housing options., A$ J# n4 D. z: v3 D/ e) J
5 ^) x! n( b% y- W+ I s) h- } In Charlottetown, the housing market started to move towards balanced
; ]6 ~0 `( S4 W2 `1 Iconditions, as some sellers had to begin to lower the asking prices on their
+ k0 H3 H( M- r/ h( n( Mhomes to make them more competitive. Activity from out-of-town and US buyers/ j6 f+ \" S& X
was down slightly compared to 2005, likely attributable to the strong Canadian
9 Q j* \9 F: _7 ?" Ndollar. Inventory levels began to creep up in the third quarter, providing5 T5 r, w2 [ S% u
buyers with more options when looking for a home.0 R* f7 r2 X( p9 F
5 M9 [* p: Q5 x" I5 `# |: @ Activity in St. John's slowed slightly in the third quarter, particularly( T2 W; I; `" w, S. H0 \7 v
among higher-priced properties, where there was a slight over-supply of homes
( V! r" y6 a% r( v: X% Fpriced over $200,000. Listing periods have increased when compared with 2005,
' A! C2 \& Z; u: S- ras some of the pent-up demand that had characterized the market over the last
, D# D+ c+ P; x8 \* k) \! ^few years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house& A+ V# G+ k, o
prices, due to a slight seasonal slowdown in the third quarter as inventory. `. Z" R6 ~; e' _
levels rose. Part of this can be attributed to the fact that many renting$ f8 }5 S+ b! z6 _# x5 K
first-time buyers were motivated to close on the purchase of a home by July 1,' f9 W" @: q9 X
when rental leases expire in Quebec. Once this date has passed some of the! _9 p) k/ @( w1 e
pressure is taken off the market, allowing buyers to visit more homes before
8 y/ r+ G2 H/ Z0 x ymaking a purchase.
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Ottawa held its position as one of the country's most stable housing
" D1 Q8 O8 t) W: b) s' qmarkets in the third quarter, reinforced by a vibrant local economy and strong+ @) w" `' p T, x! K
confidence, resulting in modest increases in average house prices. The city
3 F: M. z6 Z) z u1 k: U" j# pcentre remained a bright spot in Ottawa, with homes in this area attracting
7 } i2 z0 r+ a. S; Z9 `attention due to their convenient location and proximity to downtown$ j& E: Z/ K/ K8 a
amenities." A# X" @) N, \& H( E
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The housing market in Toronto sustained healthy activity levels
- m: O4 \9 p8 l ~- Z+ S. ?throughout the third quarter, as a strong economy helped to maintain demand
1 J% w2 k+ o# u8 sacross the city, causing average house prices to rise moderately. Toronto has; ]6 G V# M+ E6 |: H& T8 P
continued to experience modest growth in average house prices, and has been
- r4 q; n3 }# l% ddriven primarily by purchasers who are buying homes as their principle
1 r( r' m9 { l, N( Cresidence, rather than for investment.
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" j$ ?' ~& v3 }! `" d& [ The vibrant Winnipeg housing market continued to show its strength as
) @4 Z* H1 P a! Hhouse prices rose during the third quarter. The booming local economy resulted7 b0 A ~& D0 D! j9 Y4 x5 F
in a historically low unemployment rate, helping to bolster consumer
7 r& p, |- O( a" ~4 R; J1 nconfidence and Winnipeg's ranking as the city with the lowest capitalization& f$ k$ N+ ]& s2 _6 A
rate among the country's larger cities - helped to encourage buyers to enter' S. V9 R1 D+ V' c& w: F: {$ v. J
the market.5 k: d. z/ h0 t# v0 h K6 c, X
/ q% z' [; z, |/ H9 g! v In Regina, the market experienced a slight seasonal slowdown through- i* `' |8 `4 C, j& p% s9 A9 B8 z
July, as there were fewer purchasers in the market due to summer vacations. In1 v7 [3 Q7 J! M* ^
August, activity resumed to the busy pace previously seen in the spring, u% y, j# g, }8 [, q
months, as the influx of purchasers made it more difficult to find a home due
/ T" L8 J% P) G* B* cto the shortage of available inventory./ V, u: O- t- D: Q* g1 V
" S% x' u+ S! S Activity in Saskatoon remained brisk as the market maintained its& O5 z5 e4 u9 Y0 S- H
momentum from the busy spring sales period. The economy in Saskatoon remains/ y$ |% ?* E" `
vibrant, as employment opportunities are abundant with many businesses
! n. q# D: w3 ^; Tstruggling to make hires and having to recruit outside the province. k3 t# Z+ f3 t
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Calgary's housing market recorded blazing average house price increases
2 D! ` s0 t$ Ain the third quarter, in all surveyed categories. The burgeoning economy, low
F9 K, T- O: V! Tunemployment rates and low inventory levels remained the leading factors that' C' U1 U( Y# i3 f9 ?
pressured Calgary's house prices upwards. However, regardless of the soaring
& K8 @5 N! x; h0 h# V8 uprices that characterized the market - even during the typically slower summer* W- F) x: D5 L9 ]5 E2 p
season - it is expected that activity will become slightly more balanced, as
% a; R G6 y) d6 D5 \: Sbuyers are becoming more reluctant to participate in the frenetic activity., @/ E. v9 C- y3 o O
, e5 J- b0 i) O) r( a. F Edmonton's booming local economy continued to thrive in the third quarter% _4 H# b1 z3 _0 |+ U5 l( i& W9 N
as activity in the oil sands north of the city continued to flourish. Edmonton
- c, h2 N3 S# R% o1 z5 premained the hub of activity for those coming to work in the oil industry,
9 p& e" W" s/ z4 z/ Ymaintaining tight inventory levels across the city, resulting in prices
! \; K) ^* Z4 p0 @increasing at record levels. However, as inventory levels continued to improve
3 S" I. F" ?+ d8 T! e0 ~$ |: _in the third quarter the rate of price appreciation should moderate slightly
. e! q1 W* p) [6 Z8 p a7 t/ Ltowards the end of 2006.
$ |+ q3 v: b/ c8 c+ U: Z6 D% ~9 w: y* A) v# h8 ]
While Vancouver has seen a slight reprieve from the severe shortage of
/ o W+ O: j9 G* A/ Dinventory that had previously characterized the market, supply is still unable
& d! c; u; s9 r) Lto meet demand, driving house prices upwards. Vancouver has a very diverse4 M: G3 v; E+ l% p/ h
group of active buyers - from first-time home buyers to baby-boomers to
7 S% t# T% B# a* F8 _: b9 \foreign investors - all of whom fuel the demand for houses, placing added/ [: p$ J" d$ t" l% b
pressure on tight inventory levels.4 y) @( O0 o+ X0 E* q' _% N
4 u: i4 k# p8 e
Victoria's market is vibrant and supported by strong economic
% `* G& [# R3 c% f1 V' u" g* lfundamentals, fuelled by a booming tech sector and a migration of young people
6 G0 i7 e, h. Binto the city that has continued to support the area's house price increases;9 ~* j; r1 A1 C5 `. X4 i
while increased inventory levels have afforded buyers more time when searching
* `# E% R. {3 v1 M9 Z# M( ^for a home, helping to normalize the market's pace. J! r/ T! `6 P
$ w6 v) _. R* {9 U <<: Y. I7 o6 B; e5 f; ~, L# r
Survey of Canadian Average House Prices in the Third Quarter 20065 D: n+ M: v# j
0 o* Y* c/ o) Z- v1 l -------------------------------------------------------------------------9 x0 T$ |' q5 c! j& J& D7 v
Detached Bungalows Standard Two Storey" Z& R: H1 s9 |4 T1 z
-------------------------------------------------------------------------
' i$ `' @$ m) g# S$ { 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3) V Z- t8 N5 w
Market Average Average % Change Average Average' ~0 c% w/ U7 X1 [5 H
-------------------------------------------------------------------------# k" l% s1 q J; T5 h( r% C
Halifax 186,333 173,333 7.5% 198,667 199,000
' @8 ^- N0 S3 W/ y. H -------------------------------------------------------------------------$ {2 S `, f8 X% E, D6 C) h9 B
Charlottetown 145,000 141,000 2.8% 175,000 170,000( ~' I8 F7 l$ i: R( S4 b+ b
-------------------------------------------------------------------------
# f; L6 C! u2 m2 s8 @1 G+ J Moncton 135,000 127,000 6.3% 129,000 123,000
" }8 ?# i5 X. |3 H; Z* A -------------------------------------------------------------------------( X' Y% r, G4 G* F! o) n
Saint John 141,200 142,900 -1.2% - -5 X* q# P2 @& Z5 a! j# z
------------------------------------------------------------------------- N0 Q' e0 ~9 G! i
St. John's 143,667 142,667 0.7% 200,667 202,333/ g3 `* M; @# [! _% `6 j( V
-------------------------------------------------------------------------
1 @" X9 I% Y% N% v& P: @ Atlantic 150,240 145,380 3.3% 175,833 173,5834 t. h* }4 p( K2 Y$ W; O# i* I
-------------------------------------------------------------------------3 F- d; }2 m6 {& O) i
Montreal 213,691 203,500 5.0% 321,141 316,185
' V0 _& f% N; u1 r: V1 \1 d9 e -------------------------------------------------------------------------; F5 c, ~6 G) C* v+ N
Ottawa 290,083 278,417 4.2% 285,667 273,250
" |6 p6 r2 K, J1 c( e8 K -------------------------------------------------------------------------
( i f c. L+ x% x5 R Toronto 373,368 355,882 4.9% 481,523 474,7661 ~! \% u* |! a5 g% Z
-------------------------------------------------------------------------+ S# o8 }5 Z0 \/ f2 C L
Winnipeg 181,579 159,860 13.6% 202,337 180,707
1 B% C6 |9 G! W -------------------------------------------------------------------------
+ B1 F: S* ]; R) E9 | Saskatchewan 170,667 156,083 9.3% 182,600 166,500
8 b+ D3 t- w& G+ d -------------------------------------------------------------------------
' Z, _6 Y: q, k9 X( [2 T Calgary 395,067 252,411 56.5% 405,778 264,389
% S6 u# e! f6 P* Y7 Y7 V9 U" L2 |( o- ~ -------------------------------------------------------------------------
, V0 ?* P& R r$ @, R0 \ Edmonton 286,857 194,857 47.2% 316,429 206,714
' a' I& M$ q2 \ -------------------------------------------------------------------------
0 Z: I Y/ Y2 w$ ?: s Vancouver 704,250 601,000 17.2% 794,000 697,5001 z; C4 |9 g) n4 p
-------------------------------------------------------------------------) u+ h. N/ R$ q6 u: e" v* B$ a7 X' e
Victoria 375,000 348,000 7.8% 403,000 391,000
0 c9 i" c% _! U1 {$ r -------------------------------------------------------------------------
5 s! C4 J; v+ `; c National 300,365 258,202 16.3% 365,380 322,860 w$ B0 B u! r F+ p! S8 F
-------------------------------------------------------------------------
& y* U; s0 C& V7 m# O- Q6 y- k3 H- X, H- V I
-------------------------------------------------------------0 t& c0 M+ ~5 W
Standard Condominium
/ O2 u& p7 V/ r: B9 Z. Y0 L* B' M -------------------------------------------------------------" N2 f. H: V% t' U2 L% N
2-Storey 2006 Q3 2005 Q3 Condo: F5 b1 n4 h6 q; M# {
Market % Change Average Average % Change
3 t \* v4 d4 S, Y4 q- v( M& H -------------------------------------------------------------
" i: i& O- n! V: M) G4 [ Halifax -0.2% 142,000 103,000 37.9%& X# F2 D. ?( Y# }7 D& l5 e+ W
-------------------------------------------------------------# }1 Q, k( k6 y$ j8 L1 K) ~
Charlottetown 2.9% 98,000 98,000 0.0%
2 B% D0 S& U/ {7 u% z -------------------------------------------------------------4 ~+ ~4 J" K' ^5 s9 T
Moncton 4.9% - - N/A
% X4 p1 a, D. B' d7 [8 ~; W -------------------------------------------------------------7 a* n9 J- q$ b# ~" s9 a+ a; L( o
Saint John N/A - - N/A+ w/ q+ |5 _3 U( P8 k
-------------------------------------------------------------
7 ~& A! C: v1 Y4 I St. John's -0.8% 146,333 145,667 0.5%
* x5 S- s% ? f" [0 s -------------------------------------------------------------
9 W- O. s" r" `3 h2 D+ }' j$ ? Atlantic 1.3% 128,778 115,556 11.4%
! e' r5 s) M* r/ K1 H -------------------------------------------------------------
4 o( [/ ]6 u* n7 s Montreal 1.6% 193,190 188,016 2.8%
# V& G4 b Q( Q1 A2 a -------------------------------------------------------------8 F! m) C- i& f- Y
Ottawa 4.5% 181,083 172,250 5.1%8 E2 Z0 Z4 C( G! C% w$ [+ V7 i }6 E
-------------------------------------------------------------4 N/ j: r0 ~# D4 s; ^1 D
Toronto 1.4% 252,088 242,918 3.8%
" t* c6 G* T" A5 L: U% G8 Q4 m- ^0 a -------------------------------------------------------------$ V2 s4 ^0 P: V) s
Winnipeg 12.0% 105,648 96,008 10.0%, a8 p2 d/ B% t8 Z2 Q7 P) z
-------------------------------------------------------------
9 Q, j% H: C" Z. l4 M% T Saskatchewan 9.7% 106,250 101,000 5.2%
& I4 f8 I# C- b; S$ i! T5 A* Q4 r ------------------------------------------------------------- S5 L, ?* D* X4 o7 A) T6 P; c% _
Calgary 53.5% 245,844 153,867 59.8%. i0 ?0 A5 Y q) y3 p( N
-------------------------------------------------------------2 D( L+ A* M/ h( V4 V) q; E6 n
Edmonton 53.1% 200,433 131,500 52.4%
3 p6 z; t& c& N7 P -------------------------------------------------------------
4 [# H; u" ^, t Vancouver 13.8% 366,250 323,250 13.3%$ ?& Y; l; z/ [+ D |
-------------------------------------------------------------
+ D0 B$ K1 J/ e h Victoria 3.1% 229,000 220,000 4.1%$ k0 s3 M# y8 L& Z: i
-------------------------------------------------------------
8 z, t- K7 C: a National 13.2% 211,562 185,296 14.2%
4 R# T V# o. Z/ J -------------------------------------------------------------
$ q' z( a( t4 J0 C >>
4 x1 i+ c' I z& c' q7 U+ k- }* \- ~; {1 b
Average house prices are based on an average of all sub-markets examined
# G' m, x+ f/ Kin the area, except for the smaller markets of Charlottetown, Moncton, Saint: `+ a6 ~; x i' Z- s
John and Victoria.3 t% t6 B8 p6 g K: y/ \
. R! J0 k+ B+ c8 `, W The Royal LePage Survey of Canadian House Prices is the largest, most1 |9 a$ |3 J6 L7 P
comprehensive study of its kind in Canada, with information on seven types of x5 c% I2 C$ e" p: G
housing in over 250 neighbourhoods from coast to coast. This release
/ e; W7 I0 Y( h5 d2 ?2 mreferences an abbreviated version of the survey, which highlights house price
4 Y* _* S7 p) M _3 v5 {* Ptrends for the three most common types of housing in Canada in 80 communities
7 c$ ]1 g8 h! |% vacross the country. A complete database of past and present surveys is: w' V) M3 ^% J. I$ c2 m1 D0 {# o
available on the Royal LePage Web site at www.royallepage.ca, and current
! }3 w4 I: Y9 _/ }; d8 ffigures will be updated following the end of the third quarter. A printable$ u3 P8 {4 q' R- b
version of the third quarter 2006 survey will be available online on) }2 x4 n# I2 P$ ?& w
November 15, 2006.
7 E0 }7 H9 ^7 T9 ?) O) M' t# o Housing values in the Royal LePage Survey are Royal LePage opinions of6 m' m: ^! o# p6 C! ~/ i* A
fair market value in each location, based on local data and market knowledge, U9 z0 l& A2 U p! D
provided by Royal LePage residential real estate experts. Historical data is
* e. ]" z) x5 w+ ~$ A2 U. Gavailable for some areas back to the early 1970s. |
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