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Canada's housing market both vigorous and stable
7 d1 z" Y% I1 d7 e' i7 ^
& H! E# h8 v" K; ^, B j- Country's market poised to show growth throughout 2006 -0 p0 c% W3 f9 P: c8 S$ J. y/ K# q
, x- [ j* C2 _" ?
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
% \! A6 }. @6 l' q2 `exhibited moderate price increases and stable unit sales during the third8 B- `' l1 `; e+ F1 G1 K8 x
quarter. Wide regional variances continued to be the dominant characteristic
1 `2 U1 ^4 L D! zin the market, exemplified by frenzied levels of activity and double digit
7 c% L, Q( [' p1 ~- I, z8 O" e5 Jprice gains observed in the energy and commodity rich Western provinces, and
1 P% \4 F/ G# \9 xmore reasonable sales volumes and moderate price appreciation in Ontario,) h K6 N" a" j2 @0 U6 |
Quebec and Atlantic Canada, according to a report released today by Royal
: A# Y% G5 Q2 W: f8 p5 {LePage Real Estate Services.
* Q5 c) \) U$ n3 { y0 E" j
5 w4 _& j0 C" K# M! D" W5 O Nationally, market trends established through the first three quarters
: H4 b5 H6 r+ ]$ n! fare forecast to continue for the remainder of the year. Robust economic
/ q/ c2 ~0 g. o; o( c$ a$ ~" A- `conditions, low unemployment rates, modestly growing salaries and wages, and" s {) E$ v# t
sound consumer confidence contributed to the overall strength of the
: `: @$ u9 h- {/ R$ i& q g% C( Fresidential real estate sector.5 N x% v: k) }
1 \3 U0 M) t) \! D, b
Of the housing types surveyed, the highest average price appreciation5 {0 A r7 }; g# ] V
occurred in detached bungalows, which rose to $300,365 (+16.3%)2 m' e$ m3 f C5 F
year-over-year, followed by standard condominiums, which rose to $211,5628 q* y# {+ R# P+ @+ p ?
(+14.2%), and standard two-storey properties, which increased to $365,380
, ?# r8 U' h( Y+ Z1 l! W(+13.2%).
$ ^' d# s8 `7 N x+ A# s! U# \" x V2 ]4 B( u# m
"Canada's sturdy housing market continued to demonstrate steady growth
# M: b6 G& s$ {$ ?3 Oduring the third quarter. For all but the west, we have moved on from the
. q$ h: H, j8 v6 B9 ^# j7 Y( Nfrenzied expansion that characterized the first half of this decade, and are
+ L3 T6 D( C2 L" K, |$ N# xpoised to show continued growth at a more moderate pace," said Phil Soper,
0 g+ Y6 l- b; K% vpresident and chief executive officer, Royal LePage Real Estate Services.
9 Q v: ^# g2 t" t8 c"Gone is the sellers' market that we have lived with for some years. We
- ], u: {' e2 Z, Jwelcome the more reliable conditions that are characteristic of a healthy4 ?( `2 O% `9 F' F' K
balanced market."5 M8 [+ M# ]8 S0 k1 Z, K
% A$ ~ |5 F! Z3 C% }/ S Despite the double-digit rise in average national house prices,# _. e& M, W# C v) I5 P+ H
considerable regional variances were exhibited again this quarter. The shift: h; \9 e! J* A4 T
to balanced market conditions, which began in late 2005, has continued
- _: w6 q! G+ m% {& vthroughout most of the Central and Eastern regions of the country. In the core! X" ~6 T- L. B' m6 [; I: h3 E. {8 I
energy producing western provinces, the combination of very high in-migration,! g! v) L% `9 l' u
manageable affordability, and a shortage of inventory has driven record t6 L4 `6 F$ c7 D$ s0 Y* a
breaking price appreciations.. q- M) P4 g" J- J
8 p5 }4 r' R( r: c6 m1 l1 P
Echoing the second quarter and supported by Alberta's rapidly expanding
2 W! ?" N* F( t! N' |. R6 xeconomy, Calgary and Edmonton led the charge of Canadian cities with the
* ?+ ]8 ~" Q' y, Q+ Glargest house price appreciation in all housing types surveyed. ]# _6 O/ b! Z( ^
7 s' g) i+ L3 z- w; o( F& S
In Ottawa and Toronto, growth remained steady, supported by solid
7 S, {4 u/ V- }economic fundamentals, an increase in available inventory and strong consumer
1 n7 Z7 Y/ x0 L! rconfidence. While the pace of price appreciation in Ontario leveled off0 p% T! \) e W+ I- k: U$ }
slightly, the province's real estate market remains poised for modest growth.3 a" z( _& B# f( k4 c V% F9 h n
In Atlantic Canada, new housing and condominium construction offered buyers
$ j- N8 y8 N; u. R7 igreater selection at more competitive prices, resulting in a slower rate of
1 j: R' \) a) m/ @1 Iprice appreciation when compared with 2005.
7 D# I6 a9 d) ]5 Z
|9 _# G! ^$ Q While the pace of growth in Canada has slowed, the domestic housing
: N4 r# d+ e8 H$ Wmarket is expected to outperform the American market. The economic and2 P1 }& _9 n) R5 H
financial fundamentals driving the residential real estate sector in Canada# Z8 f7 J+ [- u. J
are markedly different than those found in the United States.
/ d4 X: G1 h) X9 q! o. N6 q& D) o0 C3 ?
Added Soper: "Canada's housing market is likely to outperform the
0 Y1 n- p$ q/ z: j+ ~2 s0 h9 cAmerican market through 2007. A number of factors are working in Canada's
8 o; c& s1 r2 ?+ P. k) Pfavour, including healthy personal and governmental debt levels, the B# Q9 S8 i5 n$ w# G
relatively modest rise in interest rates in our country, and general' T! [( @$ c' `+ b K3 c
affordability in our major cities. In addition, Americans are now seeing the
$ F2 [' P" F( m) f3 |downside of a tax system that encourages maximum homeowner leverage, and
# I9 g4 |& f4 c. d- B; ]aggressive financial products such as zero- and negative-amortization
& T6 W% Q; I9 `! b+ xmortgages that work only in a high price growth environment."
, \# Q* U* L0 A3 v$ |" F$ `; R
: F) a# r1 S: F" Y! N8 K: i2 D8 L <<
; Q8 O$ V7 y r) B( L0 k REGIONAL SUMMARIES
1 O+ b3 y: n! O1 P# @ >> I: r! ]% _ h
2 c# M- w7 ~0 n
Balanced conditions continued to characterize the housing market in9 ]5 U/ p. }; n" W- L
Halifax, as significantly higher inventory levels helped to moderate the rate
. @/ b! G' g; S6 a# Nof price appreciation. Buyers were increasingly choosy, taking more time
% n# p) @% d; |7 X4 h- Elooking for newer, low-maintenance properties that were not in need of
, T' X8 u1 e+ m+ ?$ `+ qrenovations.
) H; w" A" [: a* M& W# r- q
( r% j9 L. t" d6 \ The housing market in Moncton remained healthy and strong as a slight0 t7 f* ?6 A' L* K. P1 j$ u( ?
increase in inventory helped to moderate the rate of price appreciation3 Z% F& S2 L2 w( N. Q/ ^! q7 C
compared to the same period in 2005. Activity was brisk throughout August and
2 n% B; z" l4 @0 C) v2 _September and is expected to remain this way through the fourth quarter.
% P& C1 w2 O m8 n
6 w$ y9 R+ c( s! b: g. P The housing market in Saint John underwent its traditional summer
" Y0 {: A3 s; _8 q9 B- [$ sslowdown in the third quarter, with activity picking up towards the end of the$ w Q- e8 l5 \
quarter. The local economy continued to thrive, as construction on a new
" F, k) N6 M+ n5 x600,000 square-foot shopping area has begun, bringing several new box stores
# ~( d7 E3 W. Z% X( lto the area. Buyers have begun seeking less expensive fixtures for their homes$ F1 L! O1 w! [0 p; I1 {) {7 _
and are instead opting for more affordable housing options.: Y% e! `* \1 k
8 z- }2 o# u p; d In Charlottetown, the housing market started to move towards balanced9 i; A+ z6 H) F. n% M7 @9 I5 j
conditions, as some sellers had to begin to lower the asking prices on their
) e* E+ a9 n- y1 _8 P5 Yhomes to make them more competitive. Activity from out-of-town and US buyers$ l: @* x! Y8 d$ c
was down slightly compared to 2005, likely attributable to the strong Canadian
( {- t# U: v3 o/ U, M3 Y' {dollar. Inventory levels began to creep up in the third quarter, providing" ~. S3 w2 y* D1 _: P3 X1 Y* D% r) R
buyers with more options when looking for a home.
- G5 u/ a; ]. q2 I
' ^4 ?, O Q. m2 [) C" G Activity in St. John's slowed slightly in the third quarter, particularly% \ W) m3 P: Q$ y. f* T* C
among higher-priced properties, where there was a slight over-supply of homes. N* c2 \- z. O# l5 S
priced over $200,000. Listing periods have increased when compared with 2005,
. h8 T. C/ h1 r4 ^/ Ias some of the pent-up demand that had characterized the market over the last" |- F3 }) Q( g9 {# T7 `+ a
few years has been satisfied, resulting in more normal, balanced conditions.
6 J- R$ w* z1 |, X
$ Z6 r: G9 C/ h, ^& N( T6 w+ v Montreal's housing market recorded modest increases in average house
' ]% B/ B# W% L, b. B8 Vprices, due to a slight seasonal slowdown in the third quarter as inventory f2 b( }; ` J; G) o" U# I1 N
levels rose. Part of this can be attributed to the fact that many renting& I" J$ M, Z6 [$ y+ k. c
first-time buyers were motivated to close on the purchase of a home by July 1,3 x/ H2 ] K* q) E1 S
when rental leases expire in Quebec. Once this date has passed some of the
1 n& T7 N+ k, b& M$ N, ~pressure is taken off the market, allowing buyers to visit more homes before3 O" b3 h0 I9 v/ o% B4 F- z
making a purchase.+ \& v/ J; r% o3 J" ~
0 p& i' }: G3 C3 u
Ottawa held its position as one of the country's most stable housing
; E4 Q' `3 p9 b, _, ^, j& ^markets in the third quarter, reinforced by a vibrant local economy and strong
4 {+ N5 \! t/ v# nconfidence, resulting in modest increases in average house prices. The city
% Q- U) v( P" L$ Z% k8 p Vcentre remained a bright spot in Ottawa, with homes in this area attracting/ ?$ Y1 y# N" J
attention due to their convenient location and proximity to downtown3 }: W T2 r! F% U1 m/ {' p( g2 v
amenities.+ ]1 t, {2 ^1 k1 s, a5 K6 z
6 f( c9 P T" m/ d% `. |2 X$ C1 u8 g; t The housing market in Toronto sustained healthy activity levels
: q- A" S: w; v( P* Z! ~throughout the third quarter, as a strong economy helped to maintain demand
* N7 Y) D" m- d5 Q8 A. f6 S' Iacross the city, causing average house prices to rise moderately. Toronto has
( y" O# _; z. J9 q: pcontinued to experience modest growth in average house prices, and has been
* J5 x6 `) o# O" M+ p7 r ^, ~* xdriven primarily by purchasers who are buying homes as their principle
' ^- m- H" g& }5 l# o4 lresidence, rather than for investment.
$ j, x/ _9 ~% R0 k
6 f8 m2 Z2 k1 @' c( S The vibrant Winnipeg housing market continued to show its strength as
+ h- x \2 D; P+ Q0 O0 {house prices rose during the third quarter. The booming local economy resulted0 P$ y# ?6 W5 f3 w6 g
in a historically low unemployment rate, helping to bolster consumer
# b7 O# ~! @& @$ h. \; ]) kconfidence and Winnipeg's ranking as the city with the lowest capitalization9 G4 S4 q {6 z! G( E
rate among the country's larger cities - helped to encourage buyers to enter
* B+ L4 H. `9 d; H" N# E kthe market.
/ E! C. L7 }, y& Q4 {# x
6 x# L; j' n$ W/ p In Regina, the market experienced a slight seasonal slowdown through- G/ f2 q3 V0 q/ @
July, as there were fewer purchasers in the market due to summer vacations. In
* b/ s! Z( ]9 ^' i& CAugust, activity resumed to the busy pace previously seen in the spring6 [9 m# D" k4 x2 Q" ?! [
months, as the influx of purchasers made it more difficult to find a home due
' a+ `! B! H9 p5 c4 qto the shortage of available inventory.
0 F# k0 A8 S# q/ f5 X* v8 _
# M: g y$ G# g5 w1 y6 M0 o5 I Activity in Saskatoon remained brisk as the market maintained its+ S% T1 e* P% P) ]2 Q* ]
momentum from the busy spring sales period. The economy in Saskatoon remains
' }: ]% \, A8 K9 f) Y' \' a: ?vibrant, as employment opportunities are abundant with many businesses. _8 Y9 g: @( M' n/ b8 s$ }
struggling to make hires and having to recruit outside the province.2 v8 n+ p; s& h) d. C
6 E; ], p$ x" [$ O" w Calgary's housing market recorded blazing average house price increases
9 Y) z" o; k bin the third quarter, in all surveyed categories. The burgeoning economy, low* |' Q. l& i! ]/ U3 x% [
unemployment rates and low inventory levels remained the leading factors that
$ j5 j: F( [* t" d7 E8 [pressured Calgary's house prices upwards. However, regardless of the soaring
, H8 |. j, b( [1 ?2 o9 J. f9 pprices that characterized the market - even during the typically slower summer
* y8 D& v9 q7 P. P r8 H. ~( Eseason - it is expected that activity will become slightly more balanced, as, ^1 Y1 X2 m, Y+ c R8 g
buyers are becoming more reluctant to participate in the frenetic activity./ o1 y% J* N- Q9 n0 A$ ^
+ p T0 }' k; ]% h6 A Edmonton's booming local economy continued to thrive in the third quarter
) P* a5 l2 {5 }/ ^as activity in the oil sands north of the city continued to flourish. Edmonton9 C% \3 _3 X/ b/ _3 G' _% @$ a
remained the hub of activity for those coming to work in the oil industry,$ l" _: E( |0 W5 H
maintaining tight inventory levels across the city, resulting in prices% D5 {& @& k2 ~6 D. ]
increasing at record levels. However, as inventory levels continued to improve
" m- m1 E5 s0 [in the third quarter the rate of price appreciation should moderate slightly
$ O$ D# M Y6 J: U5 y9 O- X8 j5 |towards the end of 2006. & t* W( y# i( s0 j% l3 W
( p9 E, D. v2 D" ^: l& f
While Vancouver has seen a slight reprieve from the severe shortage of
2 z/ q+ ? f1 M( u; \9 Rinventory that had previously characterized the market, supply is still unable* e" J" E% _* Q3 H/ @0 Z t
to meet demand, driving house prices upwards. Vancouver has a very diverse
: G% a- H$ J, W3 K3 O( ngroup of active buyers - from first-time home buyers to baby-boomers to8 I$ X. B. P. A- Y5 u# x# _8 f+ i! t
foreign investors - all of whom fuel the demand for houses, placing added+ M: N0 r6 I0 S) G0 p. L8 g
pressure on tight inventory levels.
9 p8 {0 j9 `" _6 c8 d4 x6 h: h! Z/ ~8 p6 G1 E0 S, S
Victoria's market is vibrant and supported by strong economic% ?* d9 _2 j" D
fundamentals, fuelled by a booming tech sector and a migration of young people
/ k+ C `# A) Yinto the city that has continued to support the area's house price increases;
3 }( s. r9 J" j* _0 }+ Y! Xwhile increased inventory levels have afforded buyers more time when searching: T( D- G1 e, S7 n4 T+ ^. T, p
for a home, helping to normalize the market's pace.
3 N7 { ~5 Y7 w* ~7 J' U( w O
" T7 g- M8 a% m% [- z# k4 o. y <<& X& ~& E( O( ]) q- g
Survey of Canadian Average House Prices in the Third Quarter 2006. {0 Y( ^2 Z: K6 ^% S& m# l! y
' z- b# D2 l8 |
-------------------------------------------------------------------------% y% f$ L, t0 i2 G% J
Detached Bungalows Standard Two Storey Y3 g$ ^) t: `+ v6 B% b' I
-------------------------------------------------------------------------8 N, U2 s9 ]* [6 L
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q33 O0 x2 N& ]' t/ w4 I
Market Average Average % Change Average Average6 H! Z1 d" d& H7 c) p
-------------------------------------------------------------------------
' d! x& t: a, \# r4 p) D' h; b* j Halifax 186,333 173,333 7.5% 198,667 199,000' u: ?4 h9 m1 J( R
-------------------------------------------------------------------------1 y4 r) B- {6 A) d
Charlottetown 145,000 141,000 2.8% 175,000 170,000
. O$ S, H$ {: O -------------------------------------------------------------------------4 s" w- r5 U0 F" k8 j$ [2 U' |2 h
Moncton 135,000 127,000 6.3% 129,000 123,000+ N% k. w: D& {
-------------------------------------------------------------------------7 e& E+ N2 U( ?- q6 d
Saint John 141,200 142,900 -1.2% - -! \( X) ]: C5 J: [
-------------------------------------------------------------------------
: A- G! Q; l5 f" b8 n* c St. John's 143,667 142,667 0.7% 200,667 202,333
$ B* [# ~' B6 k -------------------------------------------------------------------------( y% H* }8 N6 r- L
Atlantic 150,240 145,380 3.3% 175,833 173,583' Y B0 c% V9 `
-------------------------------------------------------------------------
% X/ r" e# Z6 r- |8 O/ D; u Montreal 213,691 203,500 5.0% 321,141 316,185
9 E E2 N) }# ^) I# {* K! u+ ^ @, ` -------------------------------------------------------------------------
: d ]+ O/ c# k# a$ c; G Ottawa 290,083 278,417 4.2% 285,667 273,250
, P. O' H( g% B( J& b1 ~1 m$ ]3 z( l -------------------------------------------------------------------------, O. J8 D, H0 ?% c/ F
Toronto 373,368 355,882 4.9% 481,523 474,766+ `- o) B1 ~5 U" a
-------------------------------------------------------------------------
4 E% t& D" m' U& ^( M Winnipeg 181,579 159,860 13.6% 202,337 180,707' i+ \& c3 g4 b- \
-------------------------------------------------------------------------" F, S/ a9 K0 s) L3 f5 R
Saskatchewan 170,667 156,083 9.3% 182,600 166,500 `% S$ H0 k6 b, l, O9 T$ h
-------------------------------------------------------------------------
2 o% }! }- M$ ]+ ^# {# C% w! K; F$ Z1 j' n Calgary 395,067 252,411 56.5% 405,778 264,389' u% [; Y& K4 D9 w! P- W' Z0 \
------------------------------------------------------------------------- R5 f! |: E3 ~9 N% g+ T$ K
Edmonton 286,857 194,857 47.2% 316,429 206,7144 W0 p" R: w3 d
-------------------------------------------------------------------------
$ z2 L6 S6 n0 W/ @7 F Vancouver 704,250 601,000 17.2% 794,000 697,500
% z9 s; H# p0 N9 q8 x5 u8 l* u -------------------------------------------------------------------------% e0 O7 n. W) u
Victoria 375,000 348,000 7.8% 403,000 391,000
1 z, c- O0 T0 f% R4 u7 u -------------------------------------------------------------------------
( V' {& N' m% l/ H# H' K National 300,365 258,202 16.3% 365,380 322,8603 m; h2 s k' u7 t0 N6 t' q3 {6 N5 Y+ r
------------------------------------------------------------------------- w0 ]) V- r9 C1 m
5 w W1 j4 v; A. i- C
-------------------------------------------------------------/ `3 o/ @; s3 \! w0 l" o3 |
Standard Condominium' g r$ v. q4 H- G- m
-------------------------------------------------------------
* W7 E; L# k c% h- i 2-Storey 2006 Q3 2005 Q3 Condo
5 ]5 b1 N, `- U0 Y: c1 | Market % Change Average Average % Change
# a! I2 R/ L; x2 ^% H% f! a -------------------------------------------------------------
. S+ Q" t# ^9 V+ v% B9 { Halifax -0.2% 142,000 103,000 37.9%
3 F: M9 o9 R- K1 Z0 g/ s0 H -------------------------------------------------------------
9 C& D3 O9 ?: p/ a Charlottetown 2.9% 98,000 98,000 0.0%
; d, \: o' o- w -------------------------------------------------------------
, X9 z5 t* V7 |& G0 j5 i; { Moncton 4.9% - - N/A
+ A% j0 q6 `7 O% M5 J -------------------------------------------------------------: R, C7 u, f9 o" L# A
Saint John N/A - - N/A
& s4 l" v; R$ u. H& `- { -------------------------------------------------------------
; P' Q: X( k+ ?9 n4 G5 ^ St. John's -0.8% 146,333 145,667 0.5%
! J9 W& R z/ V4 G+ g( H -------------------------------------------------------------
/ O4 k+ H4 f8 X9 b Atlantic 1.3% 128,778 115,556 11.4%
* J. m$ y" `& o* W( b# j -------------------------------------------------------------; f0 Y& T: i1 L" I& z9 q
Montreal 1.6% 193,190 188,016 2.8%7 @* d4 i) x3 a9 B! p/ H
-------------------------------------------------------------
4 A! B$ v% c7 C2 E1 o Ottawa 4.5% 181,083 172,250 5.1%# p% K0 c! Z9 l) S8 l: c2 d6 u
-------------------------------------------------------------
8 p: R2 r( V- a8 n) u. z8 K Toronto 1.4% 252,088 242,918 3.8%
) c( H$ K) N$ y2 V* m -------------------------------------------------------------3 F7 R% v( k- o" @' _1 y
Winnipeg 12.0% 105,648 96,008 10.0%) @) c! u4 c( g2 _- K
-------------------------------------------------------------) f) T! U' s( }+ x- L) w- q! ~
Saskatchewan 9.7% 106,250 101,000 5.2%
1 O1 ~9 w4 @5 R" q% o2 y -------------------------------------------------------------6 p% W: U+ f9 N% d
Calgary 53.5% 245,844 153,867 59.8%4 D7 H8 C" U* }& h/ E: t
-------------------------------------------------------------8 l3 R) g3 D0 I& S
Edmonton 53.1% 200,433 131,500 52.4%
$ @% B8 L; v+ e& a -------------------------------------------------------------% Z, T% G1 U1 N
Vancouver 13.8% 366,250 323,250 13.3%
' ]+ m2 m4 O4 Y# E8 N -------------------------------------------------------------: i6 D( @* C& w" | r8 @( ^
Victoria 3.1% 229,000 220,000 4.1%: m, n) E+ x, M4 {0 l9 a g
-------------------------------------------------------------
; V' O" _% u1 ? National 13.2% 211,562 185,296 14.2%- L# m7 n' N7 c) g
-------------------------------------------------------------, h& N. U; J' Z7 ]0 D3 z
>>
; f6 X- D; V- e, R. U/ ^# L3 O
" l r5 k7 r# M0 U7 r Average house prices are based on an average of all sub-markets examined, r( c8 |: r$ _1 ^# P& \$ w
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
& p" W9 I7 q9 T, QJohn and Victoria., M2 k6 \' w* `4 B6 N
7 D1 B$ }9 s3 n: o7 G The Royal LePage Survey of Canadian House Prices is the largest, most
3 N/ O+ F9 o' l3 R! Lcomprehensive study of its kind in Canada, with information on seven types of: f3 o- m. B) q; \
housing in over 250 neighbourhoods from coast to coast. This release
8 c9 R$ r6 A/ areferences an abbreviated version of the survey, which highlights house price1 I) o; F0 e# O
trends for the three most common types of housing in Canada in 80 communities/ x5 H7 Q/ S9 `; s. t' {
across the country. A complete database of past and present surveys is
: ^# s9 \( G ~! f" {available on the Royal LePage Web site at www.royallepage.ca, and current
2 v/ A9 V8 k5 L. Z$ S+ ofigures will be updated following the end of the third quarter. A printable8 d: g1 C h8 W" \
version of the third quarter 2006 survey will be available online on
2 J' r/ A! \) I+ u* L$ E! lNovember 15, 2006.
m: X0 B0 S) t* O Housing values in the Royal LePage Survey are Royal LePage opinions of
6 f! p6 r1 y* Y8 Zfair market value in each location, based on local data and market knowledge
9 T+ ^2 Z; j! [- y0 i6 Mprovided by Royal LePage residential real estate experts. Historical data is
# F2 B! Q ~$ t, \ h$ d( T9 w o4 Y2 |available for some areas back to the early 1970s. |
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