Mississauga, ON
(December 7, 2010) -- Although
improved economic fundamentals will have a
positive impact on Canadian housing markets
moving forward, the forecast for residential
real estate sales remains static in most
major centres in 2011, according to a report
released today by RE/MAX.
The RE/MAX
Housing Market Outlook 2011, examining
trends and developments in 26 major centres
across the country, found that home-buying
activity in 2010 fell short of 2009 levels.
Housing values, however, continued to climb,
with virtually all areas reporting an
upswing in average price, ranging from just
under one per cent to 15 per cent this year.
Lower inventory levels in many markets
offset the effects of diminished demand,
propping-up price in almost every instance.
Kitchener-Waterloo, Quebec City, and St.
John’s saw the greatest increases in average
price this year, while Eastern Canadian
markets including Hamilton-Burlington,
Sudbury, Windsor, Moncton and Prince Edward
Island were the only markets that bucked the
downward trending in home sales in 2010.
By
year-end, approximately 441,000 homes are
expected to change hands nationally, a five
per cent decline from the 465,251 sales
reported in 2009. Housing values are
forecast to continue to climb, up an
estimated seven per cent to $340,000,
compared with $320,333 one year earlier.
“In terms
of resale housing activity, what many are
talking about as the new normal is actually
a return to the traditional real estate
cycle,” says Michael Polzler, Executive Vice
President, Regional Director, RE/MAX
Ontario-Atlantic Canada. “The past decade
was truly unprecedented—never before have we
experienced a run up that was as strong or
lasted as long. As we have digressed from
the typical pattern, people have forgotten
what the usual healthy cycle looks like, but
all the hallmarks are there. Ample
inventory levels, steady demand, and
moderate growth, both in terms of sales and
prices, will characterize the market in
2011. While the pace may appear lackluster
in comparison to what we’ve grown accustomed
to, it underscores the principles of real
estate 101: The market is cyclical. All
boats rise and fall with the tide.”
Greater
stability is expected to characterize the
markets in 2011, with Canadian housing sales
predicted to mirror 2010 levels at 441,000
next year, while average price is forecast
to escalate three per cent to $350,000 by
year-end 2011.
“Looking
forward, we see steady improvement in
provincial and local economies—which will
bode well for housing markets across the
board,” says Elton Ash, Regional Executive
Vice President, RE/MAX of Western Canada.
“The relentless drive in the market
reminiscent of years past will be gone and
instead, we can expect to see more normal,
balanced market conditions, with buyers
maintaining a slight edge.”
Markets in
British Columbia are forecast to lead the
country in terms of percentage increases in
sales activity next year, with Greater
Vancouver expected to climb 10 per cent,
followed by Victoria at eight per cent and
Kelowna at six per cent. After a prolonged
period of economic hardship, Windsor is once
again on track for growth, with residential
home sales predicted to climb five per cent.
Almost all
markets are reporting an anticipated
increase in housing values next year, with
St. John’s in Newfoundland-Labrador in front
with an estimated eight per cent hike in
average price in 2011. The value of homes
in Greater Vancouver, Kelowna, Regina,
Saskatoon, London-St. Thomas, Ottawa,
Sudbury and Greater Montreal is also
predicted to climb five per cent.
“Low
interest rates and improving consumer
confidence levels should stimulate
home-buying activity at all price points
next year,” says Sylvain Dansereau,
Executive Vice President, RE/MAX Quebec.
“Overall gains will be more muted—a welcome
reprieve for purchasers. 2011 will be a
year that will see more widespread recovery
across a broader array of economic sectors,
setting the stage for a better 2012.”
In the
meantime, a number of factors will continue
to support sustained sales and price growth
in the months and years ahead:
• Land
scarcity, intensification, urban renewal,
infill and renovation will continue to drive
up values—regardless of supply and demand—in
major metropolitan areas. The Canadian
housing stock is ever-evolving, particularly
in the central core of each city. With
average price pushing closer to or well past
the $300,000 mark in the vast majority of
major centres, and affordability of
single-family homes diminishing, the demand
for attainable product will rise in tandem,
bolstering the growing condominium segment
in the years ahead.
• The
upper-end of the market continues to be a
strong indication of the overall health of
Canada’s housing sector. Typically the
first segment to soften in a downturn,
luxury homes posted record sales activity in
2010, and demand is expected to remain solid
in 2011. Strong sales in the high-end will
continue to prop up average prices.
• Immigration will remain a serious force
stimulating demand, particularly given the
penchant for homeownership among today’s new
Canadians. While the formation of new
households used to take an average of five
years, a growing number of newcomers arrive
skilled, financially secure, and ready to
make their home-buying moves. It is
estimated that Canada will average 250,000
new immigrants annually.
• In the
year ahead, federal, provincial and local
stimulus in the form of continued
infrastructure spending and capital projects
will be a considerable boon to economic
stability and employment, providing
consumers the confidence to move forward
with real estate purchases.
• Volatility in the money markets will
continue to drive buyers to the tangibility
of homeownership, both as a reliable
long-term investment and a form of shelter,
particularly given low vacancy rates and a
lack of new rental construction in a number
of major centres.
RE/MAX is
Canada’s leader with over 18,000 sales
associates situated throughout its more than
690 independently-owned and operated offices
in Canada. The RE/MAX network, now in its
37th year, is a global real estate system
operating in 80 countries, with over 6,300
independently-owned offices and over 92,000
member sales associates. RE/MAX realtors
lead the industry in professional
designations, experience and production
while providing real estate services in
residential, commercial, referral, and asset
management. For more information, visit:
www.remax.ca.
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