Solid Gains in Canadian Residential Real Estate

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.

What is RSS?

RSS is a new "Web 2.0" technology that allows you to collect various types of information and consolidate it into one place. RSS stands for ; really simple syndication. The great thing for those that have techno phobia; this really is simple. Watch the video and see for yourself. The new internet explorer 7 has a built in RSS reader (free download from microsoft).

I have RSS built into my web site for both my listings as well as my Blog. This allows people to subscribe to my rss feeds and be notified of all the new posts without having to look for them.

What is a Blog

You are actually reading my real estate blog, a blog in simple terms is a web site log. Similar to a newsletter it is a great place to find information about any particular subject. I have my blog also made into an RSS feed so that my clients or other interested parties can subscribe to it. See the video below to understand what all this fuss is about blogs. Who knows maybe you will start your own? There are millions of blogs now on the web; you can try finding what you are looking for in the following sites;

Turn off your lights - Earth Hour

Earth Hour: March 29, 8 pm.

BC Hydro encourages residents, businesses and organizations in BC to turn off their lights and other electricity-consuming devices for one hour on Saturday, March 29, from 8 to 9 pm.

Earth Hour, run by the World Wide Fund for Nature, was created to take a stand against the greatest threat our planet has ever faced: global warming. On March 31, 2007, 2.2 million people and 2,100 businesses in Sydney, Australia turned off their lights for Earth Hour. This massive collective effort reduced Sydney's energy consumption by 10.2 per cent for one hour, which is the equivalent effect of taking 48,000 cars off the road for 60 minutes. Inspired by the collective effort of millions of Sydneysiders, many major global cities—including Vancouver—have joined Earth Hour in 2008, turning a symbolic event into a global movement. Residents, businesses and organizations in BC can participate by: Turning off all unnecessary lights and other electricity-consuming equipment at 8 pm for one hour, on Saturday, March 29.

Signing up at www.bchydro.com to receive information on how to be more involved in Earth Hour, including useful tools and tips. Encouraging friends to participate and sign up online at www.bchydro.com .

To learn more about ways to conserve energy in everyday life, as well as BC Hydro’s Power Smart residential programs such as mail-in rebates, the refrigerator buy-back program, ENERGY STAR windows, PST exemptions and Power Smart New Homes, visit www.bchydro.com/powersmart .