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Canada's housing market both vigorous and stable
" _+ {: ?3 V- p1 v$ Q4 L2 Z9 b/ T, r4 }4 p
- Country's market poised to show growth throughout 2006 -
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TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
, r8 N* K) c7 T7 S6 M# iexhibited moderate price increases and stable unit sales during the third
5 G1 O; ?3 u/ Q5 Jquarter. Wide regional variances continued to be the dominant characteristic( ]6 e" g$ |. |, l5 b
in the market, exemplified by frenzied levels of activity and double digit- T) i; ^- }+ d/ L! [8 Y" n6 F. @
price gains observed in the energy and commodity rich Western provinces, and
' u0 D% y& L8 g& {7 y9 n. Mmore reasonable sales volumes and moderate price appreciation in Ontario,
7 q( _" l* k( T' L: A3 V' WQuebec and Atlantic Canada, according to a report released today by Royal
, f2 B& B3 n' P! d) V( iLePage Real Estate Services.
$ L, S1 l" w7 B9 ^% H: }% O3 K) v
# _& f* _9 q1 q! u7 m4 N Nationally, market trends established through the first three quarters1 o5 z5 n2 h! Z" w& z
are forecast to continue for the remainder of the year. Robust economic
# Y9 S, g1 @6 P( w+ Pconditions, low unemployment rates, modestly growing salaries and wages, and/ [$ V) n9 w, |) Y( J9 c. a; W
sound consumer confidence contributed to the overall strength of the
- i( T# T. _7 h. C( zresidential real estate sector.
8 U: a0 _$ [) I. s3 G/ M8 i
# p$ ^2 Y4 U+ \+ P9 L0 Q Of the housing types surveyed, the highest average price appreciation8 e# ]! B G* |* W0 {3 n$ C
occurred in detached bungalows, which rose to $300,365 (+16.3%) e* }2 _& g; {3 ^8 N
year-over-year, followed by standard condominiums, which rose to $211,562
$ R. T3 T1 K i(+14.2%), and standard two-storey properties, which increased to $365,3803 D0 N8 p& {% a% a
(+13.2%).
! l) K8 a6 \1 M8 g
5 a/ ]7 Z; j: y' h "Canada's sturdy housing market continued to demonstrate steady growth `6 y: B1 v- y- N7 @* K9 e6 f
during the third quarter. For all but the west, we have moved on from the
3 M- N/ ^& J4 m$ @frenzied expansion that characterized the first half of this decade, and are
( f- I3 A2 p$ w( spoised to show continued growth at a more moderate pace," said Phil Soper,
: I5 R! C% k! K! Vpresident and chief executive officer, Royal LePage Real Estate Services.
9 D \& C9 M8 I7 @# l' X! D; K"Gone is the sellers' market that we have lived with for some years. We' }2 Y n# e ]; \
welcome the more reliable conditions that are characteristic of a healthy
: n a2 O: O( h' }balanced market."
9 C$ I( y. E% l$ ]9 C
. w' B2 Y- x. q' `/ x0 \ P Despite the double-digit rise in average national house prices,
& @ p+ ~0 o2 s7 l) Tconsiderable regional variances were exhibited again this quarter. The shift
* Q) K" z8 S8 r& X$ V: Uto balanced market conditions, which began in late 2005, has continued
# t) } O$ {9 X* S3 ythroughout most of the Central and Eastern regions of the country. In the core' s- \! m( k- A2 x8 s
energy producing western provinces, the combination of very high in-migration,
& k4 b( A# |3 _: d* t/ lmanageable affordability, and a shortage of inventory has driven record
" d+ G3 ?- z" abreaking price appreciations.: B" p+ n1 Q& ]" K% B- D; L
5 ~- `5 K& F: n: e- l Echoing the second quarter and supported by Alberta's rapidly expanding: R* B# [# K v
economy, Calgary and Edmonton led the charge of Canadian cities with the
5 |* Q) p, }1 O. ?6 D* F* olargest house price appreciation in all housing types surveyed.( ~/ `6 B' M0 ~$ `: {4 b
( {$ R/ X' n! }6 V4 w; n& }. } In Ottawa and Toronto, growth remained steady, supported by solid
+ k& {2 z( `( ceconomic fundamentals, an increase in available inventory and strong consumer
: [; Z" w5 K0 q3 B& ` L. l5 X# econfidence. While the pace of price appreciation in Ontario leveled off r1 k" F5 r: O% {
slightly, the province's real estate market remains poised for modest growth.4 B3 Z" {$ Z9 k0 v$ L
In Atlantic Canada, new housing and condominium construction offered buyers L, j- d9 ~% t2 D; G$ A, \
greater selection at more competitive prices, resulting in a slower rate of
1 q1 {* u; {3 { K a5 L8 k8 f! Rprice appreciation when compared with 2005.
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$ ?1 f4 H5 [3 p1 o9 y While the pace of growth in Canada has slowed, the domestic housing
* {7 `5 Y, b3 e* emarket is expected to outperform the American market. The economic and: I' e# u* |! k9 M! i
financial fundamentals driving the residential real estate sector in Canada
3 l2 v/ L8 n% a# qare markedly different than those found in the United States.
" I$ ?* |" Q1 N- T' w
* |; d% @# J w% L; ~( j; l Added Soper: "Canada's housing market is likely to outperform the& z' Z0 R8 H! m- T# c# Z" g
American market through 2007. A number of factors are working in Canada's: v2 P8 m4 ?8 r1 D3 p
favour, including healthy personal and governmental debt levels, the
" L: E; ^+ u6 f& |% Z; S7 g' zrelatively modest rise in interest rates in our country, and general1 B5 r/ x u e; D" N- K+ P" b
affordability in our major cities. In addition, Americans are now seeing the
. [* K' n4 W; f; [/ Mdownside of a tax system that encourages maximum homeowner leverage, and5 i( n0 K$ y: L9 N
aggressive financial products such as zero- and negative-amortization
' q+ R: `3 g' j4 a B- s7 smortgages that work only in a high price growth environment."
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2 a8 _& W7 x" L) O REGIONAL SUMMARIES
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Balanced conditions continued to characterize the housing market in
: K n1 b% G0 I4 sHalifax, as significantly higher inventory levels helped to moderate the rate
: |+ p6 H) p G; R; Hof price appreciation. Buyers were increasingly choosy, taking more time- V& E$ K+ z) f- ]# t9 `: [
looking for newer, low-maintenance properties that were not in need of/ }/ g! o) F6 }: i3 f9 h
renovations.
3 d T* `% J L2 Y( [. J& t: n& t1 A, J, L4 d
The housing market in Moncton remained healthy and strong as a slight% \1 N B" T, b3 i& e8 [2 L
increase in inventory helped to moderate the rate of price appreciation
9 B% ?( j$ M0 d2 X; I. [; qcompared to the same period in 2005. Activity was brisk throughout August and- U0 D& X7 Z( T M( ]2 o1 O
September and is expected to remain this way through the fourth quarter.
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The housing market in Saint John underwent its traditional summer
+ I/ e7 ^$ `+ t islowdown in the third quarter, with activity picking up towards the end of the
' g' e3 J5 y! |. v, dquarter. The local economy continued to thrive, as construction on a new5 ~, _2 H1 {2 v K# I6 R. W( }, b
600,000 square-foot shopping area has begun, bringing several new box stores8 e2 R+ v( k# C
to the area. Buyers have begun seeking less expensive fixtures for their homes Q; _2 _( h) z( G# W% D
and are instead opting for more affordable housing options.
. V8 V! R/ m; d2 J3 B+ F0 b# q; s
" v1 U( `: H* S6 m In Charlottetown, the housing market started to move towards balanced8 J3 f( J* s) D i* `; ^! f
conditions, as some sellers had to begin to lower the asking prices on their, Q2 q# f9 P, ]: Z, G" d) E1 f
homes to make them more competitive. Activity from out-of-town and US buyers
; x2 Q1 v- q6 Bwas down slightly compared to 2005, likely attributable to the strong Canadian& d j, p: }% y, V) r2 l# M
dollar. Inventory levels began to creep up in the third quarter, providing- z$ `- u) Q) t8 P; P5 a
buyers with more options when looking for a home.
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Activity in St. John's slowed slightly in the third quarter, particularly
% @" V& w Z2 ?3 Oamong higher-priced properties, where there was a slight over-supply of homes( l* a2 j2 B8 A
priced over $200,000. Listing periods have increased when compared with 2005,
; O U1 Q2 z7 Z$ Sas some of the pent-up demand that had characterized the market over the last
# X% s1 @/ {! @) Pfew years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house; ?% b6 W9 U% c' l4 q; T
prices, due to a slight seasonal slowdown in the third quarter as inventory
+ R S( N3 S1 e9 k/ T1 W, O2 Elevels rose. Part of this can be attributed to the fact that many renting
; O7 ?: u/ c. r1 \& dfirst-time buyers were motivated to close on the purchase of a home by July 1,
, R! n6 H; D, ^* I6 _% b- m2 hwhen rental leases expire in Quebec. Once this date has passed some of the. o! V" K) ]) |' v q% u
pressure is taken off the market, allowing buyers to visit more homes before- P8 K4 X5 z9 a2 ^6 A& ^7 l
making a purchase.
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Ottawa held its position as one of the country's most stable housing& {, r; v6 `3 D2 j; P
markets in the third quarter, reinforced by a vibrant local economy and strong- v8 V7 W! _3 @2 x6 O6 x9 _- Q& g
confidence, resulting in modest increases in average house prices. The city
7 H+ _4 t9 h; ]2 Gcentre remained a bright spot in Ottawa, with homes in this area attracting6 o* M1 y5 Q1 u
attention due to their convenient location and proximity to downtown& I$ G2 R+ P( q- h7 c
amenities.1 \7 w6 a! F8 D( E8 `; ^: |# j
6 B& |8 I$ Y1 @! K The housing market in Toronto sustained healthy activity levels
1 a9 [9 C4 H3 z5 a) y* Cthroughout the third quarter, as a strong economy helped to maintain demand/ ?+ {) B2 }+ X2 r D: L' O
across the city, causing average house prices to rise moderately. Toronto has: ~ M1 Q$ V4 y' H8 G R {8 Z9 E0 q% A
continued to experience modest growth in average house prices, and has been
1 `) Y; m0 B" |driven primarily by purchasers who are buying homes as their principle1 H+ K2 ~2 ^" K. h7 q _
residence, rather than for investment.
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~- i( [! y. A' x q3 z8 @ The vibrant Winnipeg housing market continued to show its strength as4 d. ? K( k: X7 S2 c# w6 \% q! u& P
house prices rose during the third quarter. The booming local economy resulted# \+ D; e3 I/ R0 w6 S3 E5 k
in a historically low unemployment rate, helping to bolster consumer
% c6 n; ^% o/ V# |' l" H! nconfidence and Winnipeg's ranking as the city with the lowest capitalization4 p* `/ I8 d7 ^
rate among the country's larger cities - helped to encourage buyers to enter
, A/ I( M, |; d' ^7 Zthe market.: _. s' `3 L1 v. I4 g$ I
$ X( n) _0 z6 X In Regina, the market experienced a slight seasonal slowdown through" `* o2 {2 H9 y2 V
July, as there were fewer purchasers in the market due to summer vacations. In
/ n! H; a. \# g3 gAugust, activity resumed to the busy pace previously seen in the spring
" W l3 j9 n2 x4 U) \ g3 tmonths, as the influx of purchasers made it more difficult to find a home due
) R' R$ z7 U7 E/ j- R" uto the shortage of available inventory. R+ Q0 R3 E/ m( W) d# I
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Activity in Saskatoon remained brisk as the market maintained its! H+ ~' a1 y4 s- K
momentum from the busy spring sales period. The economy in Saskatoon remains3 O2 y2 e W# m
vibrant, as employment opportunities are abundant with many businesses l+ v8 F- f' T8 b6 V
struggling to make hires and having to recruit outside the province.% w" ?4 y, _* O4 S
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Calgary's housing market recorded blazing average house price increases+ q' J* D! ?% N1 v' V, h
in the third quarter, in all surveyed categories. The burgeoning economy, low
4 x0 N. t1 r5 Junemployment rates and low inventory levels remained the leading factors that1 `0 {' g8 l E6 g9 V$ b8 d
pressured Calgary's house prices upwards. However, regardless of the soaring% h! t) L L: w+ O7 t% q
prices that characterized the market - even during the typically slower summer
3 }( f% S2 S! k: Q1 ~8 Z4 Pseason - it is expected that activity will become slightly more balanced, as6 b4 y$ p$ y( n( s7 U
buyers are becoming more reluctant to participate in the frenetic activity.* O, Q& B1 k. {+ p- p! f$ R5 W1 L( J
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Edmonton's booming local economy continued to thrive in the third quarter+ {; E* G. b0 V% }
as activity in the oil sands north of the city continued to flourish. Edmonton
% \4 x0 h' }3 O) Kremained the hub of activity for those coming to work in the oil industry,
' J: O* M6 v8 z* f! [maintaining tight inventory levels across the city, resulting in prices: p& l0 G0 B) ?, H
increasing at record levels. However, as inventory levels continued to improve
4 d# \8 [" t2 V9 t( uin the third quarter the rate of price appreciation should moderate slightly
7 ]# G' E7 x6 y2 t1 Ntowards the end of 2006.
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6 W; L" x' d- N0 |/ lWhile Vancouver has seen a slight reprieve from the severe shortage of
0 n6 i' @, r& e% ? N% o" ninventory that had previously characterized the market, supply is still unable' i, t0 D5 |1 d" F
to meet demand, driving house prices upwards. Vancouver has a very diverse
4 N2 o2 E; _+ B6 _/ p0 k* xgroup of active buyers - from first-time home buyers to baby-boomers to0 D d, Q. D3 O( T8 K
foreign investors - all of whom fuel the demand for houses, placing added7 y) B+ E; l6 S, {, m% C/ E7 e
pressure on tight inventory levels.' |" ~; i9 H3 _! ^# n3 }
* X! W2 b2 X2 V Victoria's market is vibrant and supported by strong economic
: M% ?' t! [; C9 m% \fundamentals, fuelled by a booming tech sector and a migration of young people
. {! i$ @9 s3 E4 F, K) zinto the city that has continued to support the area's house price increases;
2 U' _6 m$ q. n2 A) o/ U. nwhile increased inventory levels have afforded buyers more time when searching
a4 E' |4 L" {. \; x1 efor a home, helping to normalize the market's pace.( ^3 ^; `- y3 \; M) ]4 }
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<<
8 ~, n" Q+ Q% r- P U Survey of Canadian Average House Prices in the Third Quarter 2006
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- K0 i- ?3 o7 x9 j -------------------------------------------------------------------------; c9 D9 k0 W1 ^4 W2 C6 y
Detached Bungalows Standard Two Storey+ w# [5 I: L3 x) S; x
-------------------------------------------------------------------------
+ }% S5 c& X: e4 A# b 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
. h' _+ [3 P4 F1 A Market Average Average % Change Average Average
" e1 @3 ^" u0 A. V8 F8 Y! N9 i -------------------------------------------------------------------------
- U1 Y0 \; N5 Q6 S( k7 g Halifax 186,333 173,333 7.5% 198,667 199,0002 d0 @# e& f7 G% F7 \& D
-------------------------------------------------------------------------: _; X( x% g4 s$ U1 M6 i
Charlottetown 145,000 141,000 2.8% 175,000 170,000
3 ?; y s- V0 t* }3 T' U( w6 w# V -------------------------------------------------------------------------
+ N+ G7 [/ W N Moncton 135,000 127,000 6.3% 129,000 123,000 V! k7 G2 j7 b' {5 s8 Z* z
-------------------------------------------------------------------------
1 p& ]3 W! `) p Saint John 141,200 142,900 -1.2% - -( c9 L, i+ L& U, K0 m
-------------------------------------------------------------------------
* K# k) S4 C" O* I& @' j; }' W St. John's 143,667 142,667 0.7% 200,667 202,333
- e1 y9 P9 n) j% T -------------------------------------------------------------------------
4 q7 Z$ S: I6 i& o/ y4 y Atlantic 150,240 145,380 3.3% 175,833 173,583- \: y K3 k( f8 |+ M7 s0 {
-------------------------------------------------------------------------9 ]; w' `% i1 w0 `" y
Montreal 213,691 203,500 5.0% 321,141 316,185& i. M: V: k l" @) K$ O- Q
-------------------------------------------------------------------------
1 i% p" u; n7 c4 H Ottawa 290,083 278,417 4.2% 285,667 273,250
& }. s$ v+ }; ?9 o; f: x -------------------------------------------------------------------------
& \) w* _( c& k2 |9 r* J Toronto 373,368 355,882 4.9% 481,523 474,766
F) N9 U3 `2 H$ H) i3 }, J. _ -------------------------------------------------------------------------7 K1 z: M" ?7 \0 Z# P
Winnipeg 181,579 159,860 13.6% 202,337 180,707
% M) i/ r$ e# a3 H/ q -------------------------------------------------------------------------. |8 j8 D$ s% F0 {2 {! K7 P. Z$ ~
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
& v; O) B& v( C7 K6 J, k9 a$ C -------------------------------------------------------------------------
: n) G, [2 O4 `# B9 r6 A+ ^ Calgary 395,067 252,411 56.5% 405,778 264,389
2 z* ~0 @2 O1 C* A1 d5 o1 W -------------------------------------------------------------------------* G- V- a# @9 g! ^/ d
Edmonton 286,857 194,857 47.2% 316,429 206,714
7 C( Q' j$ o- C: t& o -------------------------------------------------------------------------9 `. t0 u6 f) X! s+ {! J# E8 [6 H
Vancouver 704,250 601,000 17.2% 794,000 697,500
* o) O9 I6 N5 [) G -------------------------------------------------------------------------' m5 K( t% C/ x/ [" r
Victoria 375,000 348,000 7.8% 403,000 391,000
* ?" C5 T. w7 f! y9 k -------------------------------------------------------------------------" g+ d4 p# N# x* X+ y1 P
National 300,365 258,202 16.3% 365,380 322,860
/ a" T; V4 s" q; x% b* O2 ~ -------------------------------------------------------------------------
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" W. H! m, }) {# p6 l/ o, r -------------------------------------------------------------' x" q4 n" A( D7 v1 s
Standard Condominium
7 Q6 n' @ \4 o& s -------------------------------------------------------------
4 W3 s* {/ g$ e" d7 M 2-Storey 2006 Q3 2005 Q3 Condo% D: ~ Y3 l/ [( P
Market % Change Average Average % Change0 y7 ~) h3 Q$ G, }" m
-------------------------------------------------------------
9 y- p* o/ P* h. k& H Halifax -0.2% 142,000 103,000 37.9%
F# n& H' k* @5 {2 s -------------------------------------------------------------
! h8 Y8 l3 t% j& S+ A Charlottetown 2.9% 98,000 98,000 0.0%+ O/ {4 p7 }) ~
-------------------------------------------------------------
& \+ ^0 n- x& {- e% O" v& z Moncton 4.9% - - N/A
' H/ @0 B1 n, F, J -------------------------------------------------------------
O0 [( f' u! H' R. R5 c Saint John N/A - - N/A
* K7 v7 n/ X9 S' A -------------------------------------------------------------
9 t2 j% E K* x; D St. John's -0.8% 146,333 145,667 0.5%4 u/ L" G$ X: G& @( y+ {+ w
-------------------------------------------------------------: K% V/ l# i' N- L! `% p2 U7 X7 x
Atlantic 1.3% 128,778 115,556 11.4%
4 j& t3 G# ~* y: v* ] -------------------------------------------------------------
) C; Y& h$ p( F) p- a F0 Y5 g. ~ Montreal 1.6% 193,190 188,016 2.8%6 X$ g1 T( z/ ~
-------------------------------------------------------------( m: ]$ G! L/ F0 Z; f
Ottawa 4.5% 181,083 172,250 5.1%
8 f! R' e; B- H" z/ s) W& } -------------------------------------------------------------4 @* e% |1 o5 ~
Toronto 1.4% 252,088 242,918 3.8% O V% W0 a! S+ e2 o5 O2 m. u" q
-------------------------------------------------------------; i9 ? @2 e! @* g
Winnipeg 12.0% 105,648 96,008 10.0%+ F; `9 g4 u* c+ O3 j3 { w6 V9 O7 L
-------------------------------------------------------------
- x1 U7 l) ]9 p' ]" Y! m Saskatchewan 9.7% 106,250 101,000 5.2%
O! O3 u% i8 b; x1 v -------------------------------------------------------------
: E7 a3 e7 |+ _6 ]. [1 P! w" _8 H# h Calgary 53.5% 245,844 153,867 59.8%
! Z7 }" g' o$ M X -------------------------------------------------------------
& L7 r# O% o. A8 T- j Edmonton 53.1% 200,433 131,500 52.4%
7 h, d* \# ]: W( O8 s' T$ {/ W- h" d -------------------------------------------------------------
# j) _* n1 h) d- }3 ?, t Vancouver 13.8% 366,250 323,250 13.3%
& R1 @2 d7 r$ s4 l% S1 ] | -------------------------------------------------------------
9 {1 S% i2 {. _! g- K Victoria 3.1% 229,000 220,000 4.1%
3 F* E n3 b9 x- S -------------------------------------------------------------
# P4 n2 a1 T/ z& M6 y1 C4 O National 13.2% 211,562 185,296 14.2%5 t+ n. p" Z/ {
-------------------------------------------------------------
7 n. o# f: L( S* m3 M5 e0 p. x >>
9 j1 b; v/ D" H! f8 s
% Y+ k9 I/ }; E9 X. {" `; }) g Average house prices are based on an average of all sub-markets examined
, r3 c, V$ J6 ^" I7 v& q' o4 din the area, except for the smaller markets of Charlottetown, Moncton, Saint! k- r9 G( t& w, U' ^7 `
John and Victoria.
. g9 k# B* A, K& [7 B# ^+ T
$ H% ? U7 q! r( M1 L) p: ^" P The Royal LePage Survey of Canadian House Prices is the largest, most
& J+ I: z! D& o( o5 `% M7 M) _comprehensive study of its kind in Canada, with information on seven types of
: `2 _$ a9 L1 w, m6 [( jhousing in over 250 neighbourhoods from coast to coast. This release
: o1 u6 v3 ~+ Freferences an abbreviated version of the survey, which highlights house price
/ z/ ?) v1 G' F2 Ftrends for the three most common types of housing in Canada in 80 communities6 e9 l" f5 d- Q8 Y0 y
across the country. A complete database of past and present surveys is
' ~4 j+ j8 T6 Mavailable on the Royal LePage Web site at www.royallepage.ca, and current
}) Z& n/ X# gfigures will be updated following the end of the third quarter. A printable) C9 @% c. E" A3 y4 R3 y
version of the third quarter 2006 survey will be available online on. \5 ]; t; V; t' @" o- `; T4 A
November 15, 2006.% K2 g2 ]) @% e- `( `4 B% D, ~8 t9 s9 R
Housing values in the Royal LePage Survey are Royal LePage opinions of
+ H) c$ y/ V' |6 g0 \! @2 H/ jfair market value in each location, based on local data and market knowledge M" I# t6 E3 c. V& j7 v( O
provided by Royal LePage residential real estate experts. Historical data is1 r# \: F- J2 d! o1 K; y7 Y) D
available for some areas back to the early 1970s. |
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