Unwavering Demand Supports Rising Canadian House Prices in Third Quarter
Saskatoon, St. John’s and Saint John report extremely strong activity
TORONTO, September 27, 2007 – Canada’s resale
housing market remained on solid ground during the third quarter as
high consumer confidence, strong employment rates and stable interest
rates led to robust buyer demand prompting average house prices to rise
in all major markets, year-over-year, according to a House Price Survey
report released today by Royal LePage Real Estate Services.
Of the housing types surveyed, the highest average price
appreciation occurred in standard condominiums, which rose to $241,818
(+15.7%), followed by standard two-storey properties, which rose to
$407,613 (+13.4%), and detached bungalows, which increased to $340,941
(+14.3%), year-over-year.
“Much like the Canadian dollar, the Canadian housing market is
charting its own course, quite independent from the United States and
its currency and housing climate. The strength of the Canadian dollar,
and the fact that the country is adjusting well to its value, will
continue to keep interest rates at their existing low-to-moderate
levels, boding well for buyers looking to enter the market,” said Phil
Soper, president and chief executive, Royal LePage Real Estate
Services. “From coast-to-coast, the country’s rich commodity markets
have had tremendous impact on local economies, and there is no
indication that this will change anytime soon.”
A wave of interest in Canada’s natural resources including oil,
gold, uranium and wheat swept across the country, and introduced some
new cities in central and eastern Canada to the trend of significant
house price appreciations in the third quarter.
Trumping Alberta’s two largest cities, Saskatoon’s housing market
experienced the highest price appreciations in all housing types
examined. Vancouver, Calgary, Edmonton, Regina and Toronto also
experienced double-digit average price gains.
Added Soper: “Despite the rising house prices across the country,
recent Statscan reports cite that the home ownership rate stands at its
highest on record. With the combination of the cost of borrowing money
remaining relatively low, the availability of longer mortgage
amortization periods, and the fact that Canada’s population continues
to grow, it is no surprise that more and more people are entering the
real estate market.”
Of note is the increasing trend of home ownership in Montreal, a
city where renting historically trumps owning. While Quebec reports the
lowest rate of home ownership in the country, the number of people
buying houses is growing; a trend likely driven by first time buyers
who, in contrast to entry buyers a decade ago, see more value in owning
their own house.
While the energy rich west has reported unwavering high consumer
confidence and high employment rates for the past several years,
central and eastern Canada are now rising alongside their western
counterparts as their local commodity industries receive increased
attention.
The oil sector remained a bright spot for Alberta and continued to
fuel buyer demand; however, the rate of price appreciation and the
intensity of the housing market scaled back from where it was 14 months
ago.
Both Saskatoon and Regina experienced a surge in demand, as levels
of in-migration were high during the third quarter. Many native
Saskatchewan residents returned to the province from the west, seeking
more affordable housing and better work life balance.
In Central Canada, Toronto’s housing market continued to set records
throughout the summer, and is poised for continued activity and rising
average house prices as the city continues to attract both buyers
relocating to the city centre from the suburbs, and newcomers to the
country.
In Atlantic Canada, the past few months have seen both Saint John
and St. John’s become the ‘Calgarys’ of the east, as several
energy-related projects in New Brunswick and Newfoundland gain
attention. While Halifax is not directly related to the oil industry,
the city is experiencing a spill-over effect as many executives are
moving to the area to be in close proximity to the oil projects.
Stronger than expected summer real estate activity characterized Vancouver and Victoria’s
resale housing markets, prompting prices to rise significantly during
the third quarter. With the high levels of in-migration that Vancouver
experiences, demand for homes in all price ranges and in all parts of
the city remains high, while inventory levels remain the same as last
year. A strong economy, low unemployment rates and high consumer
confidence contributed to the strength of Victoria’s housing market.
[Click below for full-size table]
-Tim Ayres, REALTOR – Royal LePage Coast Capital Realty – Sooke
