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Canada's housing market both vigorous and stable
8 r5 _- G8 [! p( W
% v8 r& ^' l3 o/ w- Country's market poised to show growth throughout 2006 -
q I2 X9 k9 x/ Y+ M$ {) Q+ D3 F% s2 w! n/ d
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
' l" |8 D& A5 |exhibited moderate price increases and stable unit sales during the third! J k# A3 j# h5 w. M
quarter. Wide regional variances continued to be the dominant characteristic. r& e& S9 R1 O
in the market, exemplified by frenzied levels of activity and double digit& R- t( h% S+ e9 D' r
price gains observed in the energy and commodity rich Western provinces, and
) _" j2 C) B6 [more reasonable sales volumes and moderate price appreciation in Ontario,9 Z5 U0 k8 ]' g0 y3 L2 J ?
Quebec and Atlantic Canada, according to a report released today by Royal, ~# w4 H* k+ p; C5 {
LePage Real Estate Services.
0 I6 n1 |) {$ S; q& v8 X; h
' q' D5 z' Z- r Q Nationally, market trends established through the first three quarters
# e& g9 l* q/ Q7 r( D2 a" g( M2 Hare forecast to continue for the remainder of the year. Robust economic4 ]) v# r- y* R+ ^3 ]
conditions, low unemployment rates, modestly growing salaries and wages, and
, L4 J, W) ?2 A8 Q5 usound consumer confidence contributed to the overall strength of the
3 E* k+ q# u- h" N* }7 ~residential real estate sector.% C+ w2 ~$ K8 }7 C9 P) P
5 j& U, L! c( \ }3 M Of the housing types surveyed, the highest average price appreciation" C3 s2 ]0 D! R& C
occurred in detached bungalows, which rose to $300,365 (+16.3%)" L/ I% Z/ X+ b
year-over-year, followed by standard condominiums, which rose to $211,562) z9 V( ?: d# n5 j
(+14.2%), and standard two-storey properties, which increased to $365,380
$ e/ g$ e p- v+ k(+13.2%).
( ~" S5 l9 n7 B" g- @7 G2 ]1 M$ @! W
"Canada's sturdy housing market continued to demonstrate steady growth
& B N4 w. e; ~) p0 v% `1 ?5 Z' F7 ~during the third quarter. For all but the west, we have moved on from the
- b1 |3 r% M: u+ Sfrenzied expansion that characterized the first half of this decade, and are
" h. v: N! A- J& s3 |poised to show continued growth at a more moderate pace," said Phil Soper,( P3 Y& P! ]3 l+ ~8 z- r' k
president and chief executive officer, Royal LePage Real Estate Services.
1 y( X1 n" X; m4 B1 A, R) z"Gone is the sellers' market that we have lived with for some years. We
" w9 \+ ~, }" F5 D' x- D' L: Fwelcome the more reliable conditions that are characteristic of a healthy, @# Y4 R8 A( C. h: I: a
balanced market."
8 h9 Q" a8 ^# F$ r7 A: U% S
2 E3 a& j, O7 I Despite the double-digit rise in average national house prices,
$ Y0 d9 n( L" o$ Yconsiderable regional variances were exhibited again this quarter. The shift
$ |# g* d2 ~% h0 U' ito balanced market conditions, which began in late 2005, has continued$ b9 w, h$ H- l/ I) J6 u* s
throughout most of the Central and Eastern regions of the country. In the core% H$ u9 ~0 [4 q1 o
energy producing western provinces, the combination of very high in-migration," I* l& V& @+ D# N/ E
manageable affordability, and a shortage of inventory has driven record/ G% v, E! H/ ]( j# x7 c. L
breaking price appreciations.
' i0 p' i+ |' H9 E2 E0 s
+ h0 ?% o4 N: x3 l' D Echoing the second quarter and supported by Alberta's rapidly expanding
6 D; V$ X: j) Q7 V# S' Deconomy, Calgary and Edmonton led the charge of Canadian cities with the4 w _& I' ]8 ^- z3 k2 u: p
largest house price appreciation in all housing types surveyed.
7 k7 |: j( p! s7 H7 J4 b1 E$ [4 m3 S/ p
In Ottawa and Toronto, growth remained steady, supported by solid$ f- A+ x8 C, o! u( Y+ l
economic fundamentals, an increase in available inventory and strong consumer$ S. y8 Y8 `0 ?
confidence. While the pace of price appreciation in Ontario leveled off1 v) d: r* r( u1 V' N# d0 q, e; r+ F
slightly, the province's real estate market remains poised for modest growth.
- D# w6 _8 u: m$ R/ k9 DIn Atlantic Canada, new housing and condominium construction offered buyers# x7 S. T) n4 g! S
greater selection at more competitive prices, resulting in a slower rate of1 E! d! c% R. G- h% D
price appreciation when compared with 2005.
$ b5 M# v& w& N
! m0 ]5 A6 m8 |9 \' O# K While the pace of growth in Canada has slowed, the domestic housing1 f; o; h/ d* |3 A0 D3 p
market is expected to outperform the American market. The economic and
' \6 ~, F' i9 L6 O; ^financial fundamentals driving the residential real estate sector in Canada% \/ v' F y$ t, v, S# b* q, T; v1 o
are markedly different than those found in the United States.
* ~3 t1 E+ Z7 t: b5 H, w5 V/ ]9 p# l
$ T- d* T+ J& z9 |% Z; L# j$ T Added Soper: "Canada's housing market is likely to outperform the9 S. z7 Q) [/ M4 M% G5 \: c/ e" K
American market through 2007. A number of factors are working in Canada's
( P, n9 |8 l0 g1 L6 Nfavour, including healthy personal and governmental debt levels, the+ k. Z! N0 }/ d$ R
relatively modest rise in interest rates in our country, and general
7 a+ A* M {9 I' k1 Zaffordability in our major cities. In addition, Americans are now seeing the9 w& i( f! U( Z
downside of a tax system that encourages maximum homeowner leverage, and- M/ V- K/ v/ O5 s7 U( ~" X
aggressive financial products such as zero- and negative-amortization
- l( g/ w2 {* f; X5 l; t; }8 p' Tmortgages that work only in a high price growth environment.") d; T3 B( r& {5 C
9 L7 R+ f" q: T <<- b! I5 F0 c, N- x9 f% b
REGIONAL SUMMARIES
. F& }. i) s" D: a/ z >>
2 Z' s- w0 Y! f! [" o1 Y) P& m6 x& b S; }$ D# m' ]9 H1 A
Balanced conditions continued to characterize the housing market in* d3 r3 g# d! O9 \7 `/ `$ f
Halifax, as significantly higher inventory levels helped to moderate the rate' A5 q" g! `5 B) f/ A
of price appreciation. Buyers were increasingly choosy, taking more time
" ]/ d8 P2 @' @. dlooking for newer, low-maintenance properties that were not in need of
. v* ~1 Q0 m7 V3 m/ P xrenovations.
. z g! \$ y$ U( Q: n/ d+ E9 p( D+ s1 a4 n
The housing market in Moncton remained healthy and strong as a slight8 C; _# B" j0 _1 R
increase in inventory helped to moderate the rate of price appreciation/ a. x$ a% B" c8 j' q
compared to the same period in 2005. Activity was brisk throughout August and" G& M. U) X# s1 L) j+ C
September and is expected to remain this way through the fourth quarter.& X+ `9 ?6 B. X @- a& \* l
8 |! X1 v7 h3 P0 n$ t1 n The housing market in Saint John underwent its traditional summer/ U- X/ o. t: N, Y4 E
slowdown in the third quarter, with activity picking up towards the end of the
( G8 c0 `& l1 U8 T1 Y7 [1 Wquarter. The local economy continued to thrive, as construction on a new
% G( R: e5 g6 o0 S9 G, {$ x600,000 square-foot shopping area has begun, bringing several new box stores; E/ N0 T5 R/ R6 O# S+ v+ t
to the area. Buyers have begun seeking less expensive fixtures for their homes/ c6 T4 r: v! G" @0 f5 x
and are instead opting for more affordable housing options.' d3 ]$ }9 t& F3 b0 o/ B
. E, v/ s1 e; x" s In Charlottetown, the housing market started to move towards balanced& v- c8 w" x# T) w5 G! F1 r# Q
conditions, as some sellers had to begin to lower the asking prices on their
7 @3 l$ }9 u% d+ Jhomes to make them more competitive. Activity from out-of-town and US buyers# c5 Q2 G8 u7 p
was down slightly compared to 2005, likely attributable to the strong Canadian
% X5 z4 @9 l+ G% {4 m1 H5 R- P0 Y8 e/ Idollar. Inventory levels began to creep up in the third quarter, providing. m0 N- B' o/ ~' \% Z
buyers with more options when looking for a home.- }8 m8 K u; K) w
' b2 w( F0 m" M2 Z$ D3 L" T Activity in St. John's slowed slightly in the third quarter, particularly) f- w' a5 @" R2 p
among higher-priced properties, where there was a slight over-supply of homes
. j+ G) k5 d; S# Tpriced over $200,000. Listing periods have increased when compared with 2005,
1 p6 u/ [: [7 q* kas some of the pent-up demand that had characterized the market over the last
0 E, X) z; h6 k; ?7 f+ mfew years has been satisfied, resulting in more normal, balanced conditions. J* \: {+ @+ C# n
r! @0 v# ?0 B" e: D/ P
Montreal's housing market recorded modest increases in average house* B0 w1 K9 s: [
prices, due to a slight seasonal slowdown in the third quarter as inventory
7 t, L, P9 k3 \0 v1 |. ?levels rose. Part of this can be attributed to the fact that many renting! ?% j0 m( i7 Z
first-time buyers were motivated to close on the purchase of a home by July 1,
; d" M: V; u2 K2 ^9 xwhen rental leases expire in Quebec. Once this date has passed some of the
. j5 y+ a1 B" p3 r, T: S% P0 Qpressure is taken off the market, allowing buyers to visit more homes before
9 v. ~+ _: c) b9 |4 o: Cmaking a purchase.9 x" i6 G9 S8 i: f
6 w+ x4 t5 J7 ~8 R9 N1 `
Ottawa held its position as one of the country's most stable housing
5 n' \: R! c2 ^! ^markets in the third quarter, reinforced by a vibrant local economy and strong# Q' [1 R% J% n& ?5 Y
confidence, resulting in modest increases in average house prices. The city! r( j* A' f+ |( E1 B ~" Z" l% x0 i
centre remained a bright spot in Ottawa, with homes in this area attracting
- I& r4 ~. F3 _+ ]2 N4 Cattention due to their convenient location and proximity to downtown2 y" z5 j6 U9 @( ^8 d0 D" y3 X! q
amenities.
3 E6 j5 a4 e( {, s" c( }
, f8 U0 P7 J' c) @, v The housing market in Toronto sustained healthy activity levels: U, z( E4 I6 l: e$ ^
throughout the third quarter, as a strong economy helped to maintain demand
# H5 q0 P9 _! M+ k( I" n( b' k( Wacross the city, causing average house prices to rise moderately. Toronto has+ C* l; }" s( }- v: P
continued to experience modest growth in average house prices, and has been
! W1 f( @, n" k1 I! gdriven primarily by purchasers who are buying homes as their principle
* q6 e( p* h# s. U4 j# Qresidence, rather than for investment.7 x4 e8 r) c9 V* Y% Q3 {
0 B9 A% P+ Z: k3 F! v9 Y ~( z The vibrant Winnipeg housing market continued to show its strength as1 s* o. S& Y' ` A% L
house prices rose during the third quarter. The booming local economy resulted3 k* r9 o/ C) F
in a historically low unemployment rate, helping to bolster consumer
% X4 ~8 n( _, z% Xconfidence and Winnipeg's ranking as the city with the lowest capitalization$ p/ `8 O2 H/ H! U0 z
rate among the country's larger cities - helped to encourage buyers to enter
" U8 C m9 D- q- Zthe market.6 s# q1 K7 D3 _2 _" q
3 u n$ }" [; C3 N1 R" T% ~ In Regina, the market experienced a slight seasonal slowdown through
4 f$ B+ ~; C$ e- f) q$ R# N. EJuly, as there were fewer purchasers in the market due to summer vacations. In
; Y5 Q6 @2 N3 QAugust, activity resumed to the busy pace previously seen in the spring6 @7 f4 y3 ~& w; H, ?! Q5 L
months, as the influx of purchasers made it more difficult to find a home due/ w& d) m0 A7 ^
to the shortage of available inventory.' T: L! D: p4 P0 e# I
0 M: A5 O6 Q* ~, Z5 b) ]
Activity in Saskatoon remained brisk as the market maintained its
C% B1 w9 [- h: v: X$ a/ umomentum from the busy spring sales period. The economy in Saskatoon remains) P$ j' R) N3 \, U8 z" W! l
vibrant, as employment opportunities are abundant with many businesses" E* F0 i4 k b9 u
struggling to make hires and having to recruit outside the province.
% m) M \, p% ?. N' P& u: Y$ n0 Q6 L) s3 Y" u" w5 y& T4 H
Calgary's housing market recorded blazing average house price increases) r5 Q$ ]1 e. X6 k9 u. Z8 s
in the third quarter, in all surveyed categories. The burgeoning economy, low
- ]/ d3 W) W6 a' w K8 ~$ H$ J% Kunemployment rates and low inventory levels remained the leading factors that
2 a8 D7 Z/ `* |& d! R6 C( @9 upressured Calgary's house prices upwards. However, regardless of the soaring9 E) j# t4 |' A ]. N
prices that characterized the market - even during the typically slower summer
$ u- G1 w1 e O+ zseason - it is expected that activity will become slightly more balanced, as8 p7 t5 P( r* }" j. q$ f+ J
buyers are becoming more reluctant to participate in the frenetic activity. ~; P6 }% b8 {/ H; l, i
5 Q s4 t! y8 ]8 O, p" e Edmonton's booming local economy continued to thrive in the third quarter
: V/ W; P& H2 y% `+ ~) o: ias activity in the oil sands north of the city continued to flourish. Edmonton
+ B5 k. P% y W4 }remained the hub of activity for those coming to work in the oil industry,
* s. M3 }$ j1 e: xmaintaining tight inventory levels across the city, resulting in prices% p' G9 Y2 Q2 |- J4 i
increasing at record levels. However, as inventory levels continued to improve. D" |3 I O1 D5 ?6 U8 @
in the third quarter the rate of price appreciation should moderate slightly
. C/ p" [; b: F; ztowards the end of 2006.
7 e/ s& K3 \7 D& U* G# Q& q; y# D4 U, |/ s: L
While Vancouver has seen a slight reprieve from the severe shortage of
+ t8 h3 b$ F5 J- jinventory that had previously characterized the market, supply is still unable- u- g7 @0 G: ]% }
to meet demand, driving house prices upwards. Vancouver has a very diverse( }8 W! U6 O, s4 D) {3 a
group of active buyers - from first-time home buyers to baby-boomers to
2 q2 J! P! x& E7 ^& i' {, [) Pforeign investors - all of whom fuel the demand for houses, placing added
. V9 f6 @. _% A, epressure on tight inventory levels.$ l# p( F8 E0 [
7 t6 X1 c3 N$ m1 ]; ^ Victoria's market is vibrant and supported by strong economic
i s* q' [! o. b! xfundamentals, fuelled by a booming tech sector and a migration of young people
2 z( n9 v* |; w, L) r2 c; E1 c( Vinto the city that has continued to support the area's house price increases;( T9 q0 ?. g- U% m& V* M
while increased inventory levels have afforded buyers more time when searching+ U$ F0 h1 ?7 L
for a home, helping to normalize the market's pace.: B6 ]( [ R) c6 b: w4 _
2 m2 B+ c. ]+ Q/ L
<<* w7 l* U# z" L. `8 H
Survey of Canadian Average House Prices in the Third Quarter 2006
0 @" a( g' {8 ^! ` q7 K8 E
7 T7 W& t; ]6 B+ m% E -------------------------------------------------------------------------
4 g" i; C1 G _% S0 f9 |( v Detached Bungalows Standard Two Storey
, Z) Y/ R2 z- p+ ~ -------------------------------------------------------------------------$ `* c5 \% @+ Q- U
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q35 t: F, ^1 b f6 c3 c% E
Market Average Average % Change Average Average \# ?8 ?+ l$ [! {. h
-------------------------------------------------------------------------1 a$ Y n% A2 Z# a, I' N8 G4 e6 x
Halifax 186,333 173,333 7.5% 198,667 199,000! e7 E! f# ^2 e: W ?
-------------------------------------------------------------------------2 _7 f. n. z( B/ @6 s5 U) C6 P
Charlottetown 145,000 141,000 2.8% 175,000 170,000
% O; o t: k P; {' U -------------------------------------------------------------------------
4 r: {% ^" Y" F9 [+ S, A& h0 k Moncton 135,000 127,000 6.3% 129,000 123,000
. Q" D) z# s# k% n+ J7 } -------------------------------------------------------------------------
# T4 A$ z) r& Y# m6 c8 O4 r# ` Saint John 141,200 142,900 -1.2% - -& d* \, L4 I5 T' Y# f$ d
-------------------------------------------------------------------------
: d4 h9 g- c1 ?9 g* t l St. John's 143,667 142,667 0.7% 200,667 202,333
) ~# J' x3 W: n6 K -------------------------------------------------------------------------$ N: \# E+ }) m) ?, y+ b: d/ R$ l9 I/ H
Atlantic 150,240 145,380 3.3% 175,833 173,583
/ \1 z/ W, ~. l0 A0 Y -------------------------------------------------------------------------
7 T2 Q8 i0 [: E# K* Y Montreal 213,691 203,500 5.0% 321,141 316,1850 X- @! k" K; T5 _$ B# I' Z
-------------------------------------------------------------------------
0 ~9 q) k; m+ U! R Ottawa 290,083 278,417 4.2% 285,667 273,2507 M3 F; v2 V: N; s3 \& T5 @
-------------------------------------------------------------------------; v" F2 h+ J1 k, d& n
Toronto 373,368 355,882 4.9% 481,523 474,766
4 K+ C, |8 W( G5 \+ X* y -------------------------------------------------------------------------8 `4 G2 C e! U+ D9 l) C+ v
Winnipeg 181,579 159,860 13.6% 202,337 180,707
# t$ k9 |8 {( s6 [ -------------------------------------------------------------------------0 C( A/ P/ j$ a2 A; n7 j5 K
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
0 [' |8 o' W; H -------------------------------------------------------------------------( b' U5 o6 \: W m% h! S
Calgary 395,067 252,411 56.5% 405,778 264,389& z+ y8 _% \8 J7 E$ }0 l6 q
-------------------------------------------------------------------------
7 v* k9 a! n" k: n2 r$ i8 t Edmonton 286,857 194,857 47.2% 316,429 206,7146 c1 T8 X$ S" A
-------------------------------------------------------------------------' b* s. f" Y j
Vancouver 704,250 601,000 17.2% 794,000 697,500
2 w4 \# r" |# g -------------------------------------------------------------------------
* ?& `% k a3 w" l& Y9 t' n* m+ \+ w Victoria 375,000 348,000 7.8% 403,000 391,000
7 W' X! a# A+ U, a% J1 u' V -------------------------------------------------------------------------1 k4 b4 @& h$ D5 z7 p( I8 z
National 300,365 258,202 16.3% 365,380 322,860
8 @2 K% v) p; x! L J ------------------------------------------------------------------------- q. `- s/ _ b( C+ @
- M9 \/ ? ~! ? -------------------------------------------------------------
w6 A% y' `& l b; Z x Standard Condominium
- v+ l4 |7 t3 ]4 v V) ? -------------------------------------------------------------, w$ d% Z0 {/ C3 c% b- C' E0 h
2-Storey 2006 Q3 2005 Q3 Condo
2 |7 R1 ]4 E, d- T y- D Market % Change Average Average % Change& n: r) l" I S( Q3 M8 f }
-------------------------------------------------------------! j F' E8 v- h, z% z
Halifax -0.2% 142,000 103,000 37.9%
- o7 } \9 @( U -------------------------------------------------------------
- k7 ?. _# [" y ^/ @1 K Charlottetown 2.9% 98,000 98,000 0.0%
1 B. A* n0 @0 R, p" c' W -------------------------------------------------------------
/ l* ]5 w; r2 j Moncton 4.9% - - N/A
. ?& A7 X' M% P5 x" { -------------------------------------------------------------4 b+ w$ i/ A% C9 j# |9 P
Saint John N/A - - N/A
" \7 G A$ W* C8 j -------------------------------------------------------------9 Y. K& u; e' u1 a$ F5 E! g ~9 Z' o
St. John's -0.8% 146,333 145,667 0.5%
. ]5 Z1 d- F: P -------------------------------------------------------------' F) p4 C1 j) i
Atlantic 1.3% 128,778 115,556 11.4%
8 Y. A; f( I7 s" h" [/ | -------------------------------------------------------------& k7 g3 d2 Q- Z' \" D$ |+ a
Montreal 1.6% 193,190 188,016 2.8%
8 r' q7 P* p5 O4 X -------------------------------------------------------------
0 B4 J( b6 _: V+ q# O4 H1 Q Ottawa 4.5% 181,083 172,250 5.1%
$ F3 g: |) N" S" O4 j- ^& v2 j% |; v -------------------------------------------------------------+ m* `" a) n7 v
Toronto 1.4% 252,088 242,918 3.8%
3 Q- G0 i6 |( R) e -------------------------------------------------------------
. c) r/ o0 I8 d- R Winnipeg 12.0% 105,648 96,008 10.0%8 ~8 J7 ~9 z: ?! [9 S
-------------------------------------------------------------% ?. x/ Q4 u) `/ `$ e
Saskatchewan 9.7% 106,250 101,000 5.2%
6 D0 }7 L+ S8 Q4 u& f* B: A* o: ^, F -------------------------------------------------------------8 f$ _4 c" |0 w/ V r9 o% {8 Z& } i
Calgary 53.5% 245,844 153,867 59.8% [/ D! i, }& h; j
-------------------------------------------------------------5 M& G+ w v1 z5 [
Edmonton 53.1% 200,433 131,500 52.4%: h" G5 u8 z- @: \3 H
-------------------------------------------------------------" x0 {- s1 ~: `$ C; y7 R
Vancouver 13.8% 366,250 323,250 13.3%. D3 Q# b; c8 ]2 z f
-------------------------------------------------------------
; l$ Y" R1 J6 l Victoria 3.1% 229,000 220,000 4.1%
. { q, Z, Z8 @5 Q, ?$ S -------------------------------------------------------------
* d% A' h- J8 \, J. C3 E National 13.2% 211,562 185,296 14.2%5 T# q" z% A3 k) h" n2 {- H
-------------------------------------------------------------
* Q! O2 W. j6 [6 X >>2 P2 K8 r+ y) t5 [* A- W
8 |9 J; L X5 ~ c/ C2 A Average house prices are based on an average of all sub-markets examined
9 ~9 l q: O. c6 din the area, except for the smaller markets of Charlottetown, Moncton, Saint
7 D0 @8 I' U5 q& y4 K v2 zJohn and Victoria.
7 K7 \9 u$ G) m* {8 u4 B; m) c9 Q
The Royal LePage Survey of Canadian House Prices is the largest, most" B; R$ G. I, C% N6 ^2 c$ s0 G
comprehensive study of its kind in Canada, with information on seven types of
3 S! ~2 ~% T( ^* B, W( Rhousing in over 250 neighbourhoods from coast to coast. This release7 G2 }' k* C- V1 J; Q' x# j3 b3 l
references an abbreviated version of the survey, which highlights house price1 s* Q* l3 D( V& k# J: Q( a
trends for the three most common types of housing in Canada in 80 communities
' ?+ B- @) P' k' x; c# lacross the country. A complete database of past and present surveys is
8 a1 `3 {4 m1 k* z1 ]! a$ {, Zavailable on the Royal LePage Web site at www.royallepage.ca, and current! G) u* h& ]$ M5 R$ _$ t
figures will be updated following the end of the third quarter. A printable3 Z( V# e3 ?! b% d, [
version of the third quarter 2006 survey will be available online on
' H5 U; F- g6 R" s4 e W, E0 [November 15, 2006., y! n+ U* G$ V# t
Housing values in the Royal LePage Survey are Royal LePage opinions of
. f1 i' S. v' mfair market value in each location, based on local data and market knowledge
5 P* r3 a$ Z! }/ nprovided by Royal LePage residential real estate experts. Historical data is
% D0 u9 l. H. S6 _+ \! Z- h2 Lavailable for some areas back to the early 1970s. |
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