Canadian Housing Market Exceeds Expectations In First Quarter
- Strong consumer confidence and healthy provincial economies boost
demand -
TORONTO, March 29 /CNW/ - Canada's housing market got off to a
surprisingly strong start in 2007 with average house prices rising in all
major markets surveyed, according to a first quarter report released today by
Royal LePage Real Estate Services. The combination of resilient consumer
confidence, moderately low interest rates and improved affordability across
most of the country led to greater than expected activity during the typically
slower first quarter.
Of the housing types surveyed, the highest average price appreciation
occurred in standard condominiums, which rose to $230,146 (+16.3%)
year-over-year, followed by detached bungalows, which rose to $316,993
(+14.9%), and standard two-storey properties, which increased to $378,148
(+11.8%).
While national average house prices experienced robust appreciation,
significant regional differences continue to characterize the market. Fuelled
by the energy sector, Alberta's economy continued to show extremely high price
appreciation, while more moderate levels were noted in the central and eastern
regions of the country. A notable ripple effect from the booming markets in
Alberta was observed in Saskatchewan as Saskatoon reported unprecedented
spikes in house prices and activity, driven by in-migration and strong demand
as former residents returned from cities like Calgary, escaping skyrocketing
housing prices and the rapidly rising cost of living.
"The strength of last year's housing market has carried into the first
quarter of 2007, creating a robust market, chock-full of activity with house
prices rising in all major cities," said Phil Soper, president and chief
executive, Royal LePage Real Estate Services. "The recent months have produced
record-breaking sales levels in many markets and unwavering demand - momentum
which will undoubtedly be maintained through the always busy spring market."
Sustained growth in the urban centres and surrounding suburbs of most of
the country's major cities is expected to characterize the real estate
landscape in 2007. Buyers' demands for affordable housing and the desire to be
near the city's core continues to fuel expansion in the condominium market,
while suburban neighbourhoods continue to develop as they attract a large part
of the population growth.
Added Soper: "A number of factors are contributing to the vibrancy of the
Canadian market. First-time buyers continue to be active despite expectations
that many would be priced-out of the market; employment levels continue to
improve, resulting in tight labour markets and increasing salaries; and stable
interest rates have led homebuyers to feel confident that the cost of
borrowing won't spike anytime soon."
The rapidly expanding Alberta economy has driven employers to place
increased focus on recruitment from out of the province, helping position
Edmonton and Calgary among the top three cities with the highest house price
appreciation across all housing types surveyed. Healthy economies in
Saskatchewan and Manitoba have also led to significant market activity and
rising house prices.
In Toronto, strong demand and a limited number of well-priced, quality
listings led to moderately rising, yet steady house price appreciation.
Despite increases that are not as steep as in other major cities, Toronto is
still anticipated to have another near record year.
Mild winter conditions and healthy local economies boosted consumer
confidence in Ottawa and Atlantic Canada provoking buyers to enter the market,
driving up both activity and house prices at a steady pace. Similarly, strong
consumer confidence and a thriving economy in Montreal drove purchasers to the
market resulting in moderate price increases, and record-breaking levels for
units sold.
In most regions of the country, slight increases in inventory levels have
afforded buyers with more options and the opportunity to take more time in
making their purchasing decisions.
REGIONAL SUMMARIES
The strength in Halifax's market is supported by strong consumer
confidence and low mortgage rates. Although listing inventory has been on the
rise, strong demand has meant that homes on the market have been selling
quickly and keeping inventory levels in check. First-time buyers continue to
be very active, driving demand for condominiums and moderately priced homes.
New condominiums in Clayton Park continue to be popular with buyers and
account for much of the average price appreciation seen in the area.
Job growth in the service and construction sectors have maintained strong
consumer confidence in Moncton and created a stable and balanced market in the
first quarter. Several new projects such as the new Dieppe City Hall complex
and the new justice centre have helped attract job seekers to Moncton,
sustaining positive in-migration and driving demand for housing. Semi-detached
homes offer an attractive price point, making them popular with first-time
buyers, who remain a very active purchaser group. On the other side of the
spectrum, sales of homes priced above $200,000 have experienced robust growth,
as some buyers are increasingly willing to pay more for luxury features.
In Fredericton, average house prices have experienced very moderate
appreciation in the first quarter of this year, in comparison to the same
period in 2006, due to a surplus of inventory. Recent construction of several
condominiums in both the North Side and South Side of the city have provided
buyers with an abundance of new properties to choose from. However,
Fredericton's healthy economy and strong job market, predominantly in the
government and university sectors, has supported buyers entering the real
estate market and maintained demand.
In Saint John, strong economic outlook due to major projects in the
energy sector have led to robust demand in the housing market, shifting market
conditions in the sellers' favour. The major upgrade of the Point Lepreau
power generation station, as well as the construction of an oil refinery and a
liquefied natural gas terminal, are attracting skilled labour into the area
and having a positive impact on the local economy.
In Charlottetown, a mild winter contributed to a higher than usual number
of homes trading hands in the first quarter. AIM Trimark's annoucement of the
relocation of its Global Enterprise Centre in Charlottetown is expected to
boost the city's economy, further strengthening the housing market. Lower
interest rates and good housing affordability also contributed to robust
market activity in the first quarter.
In St. John's, heavy snowfalls in the first quarter discouraged buyers
from entering the marketplace and dampened price growth. However, market
conditions should shift from being in the buyers' favour to a more balanced
market once the weather improves. The continued loss of workers to Alberta has
led to a shortage of skilled tradesmen in St. John's and delays in new
construction are common, leading some buyers to turn to resale homes instead.
Montreal's housing market showed its strength in the first quarter, as
strong consumer confidence and a thriving local economy drove purchasers into
the market, resulting in moderate increases in average house prices. Activity
in the condo market was strong, however luxury condominium units tended to
attract fewer purchasers and stay on the market slightly longer than more
affordable units. Despite predictions that Montreal's housing market is headed
for a slowdown, the market got off to a strong start, reporting one of the
best first quarters on record in terms of units sold.
Ottawa's housing market experienced record activity in the first quarter
as mild weather drew buyers into the market and boosted average house prices.
The city's healthy local economy and job market, supported by strong
technology and government sectors, have continued to attract new buyers into
the market. First-time buyers were the most active purchaser group in the
quarter, driving demand for condominiums and starter homes.
Toronto's housing market has once again been characterized by high levels
of competition, particularly in the most sought after neighbourhoods of
central Toronto. Rising property prices provoked some affluent purchasers,
searching for homes priced in the $1-million range, being priced out of
traditionally upscale neighbourhoods. Areas such as Riverdale, High Park,
Parkdale and the Annex offering high-quality homes at more affordable prices
subsequently received additional attention. The condominium market has
remained a bright spot in Toronto's housing market, with increases to
inventory levels as new construction helps to satiate the demand of
purchasers.
The housing market in Winnipeg got off to a strong start in the first
quarter of 2007, as average house prices rose by double digits in most
neighbourhoods. Manitoba's provincial economy continued to thrive in the first
quarter, supported by projects such as the construction of the Manitoba Hydro
Building and the Red River floodway, as well as sustained growth in the
residential construction sector. Approximately half of all listings sold for
over list price, resulting in some purchasers becoming frustrated by the high
level of competition in the market.
In Regina, the housing market got off to a brisk start, as in-migration
to the city fuelled strong levels of demand. Abundant employment
opportunities, an excellent quality of life, and some of the most affordable
housing in the country continued to draw people back to the city. Listing
inventory remained tight throughout the quarter, pressuring house prices
upwards, resulting in a significant number of multiple offer situations.
In Saskatoon, strong in-migration, particularly from the Western
provinces led to unprecedented demand for housing in the first quarter. Many
former residents of Saskatchewan have been drawn back to the province by the
abundance of employment opportunities in a variety of sectors and relatively
affordable cost of living. The housing market in Saskatoon has also started to
attract out-of-province purchasers, looking to invest in income-generating
properties such as multi-unit apartment buildings, duplexes and condominium
units.
Calgary's housing market enjoyed significant price appreciation in all
housing types examined as a steady influx of in-migration and strong consumer
confidence boosted prices upwards by double digits in the first quarter.
Calgary's vibrant economy continues to be supported by the province's active
energy sector and high employment rates. Housing type popularity is largely
dictated by price, with houses under $500,000 being in highest demand. Due to
rising house prices, entry-level homes and condominiums have experienced a
surge in activity.
The continued strength of Alberta's economy resulted in Edmonton's
housing market outperforming expectations in the first quarter. The economy in
Edmonton continues to be driven by continued growth in the energy sector in
the oil sands north of Edmonton. Demand for skilled labour has remained strong
in the first quarter, resulting in continued in-migration to the city.
Edmonton continues to act as a large service hub to all of the activity taking
place in the North, resulting in unsurpassed demand for housing across the
city.
Vancouver's housing market continued to show its strength in the first
quarter, supported by sustained in-migration and growth across the city. New
inventory was unable to satiate the demand of purchasers. The market remained
firmly in the sellers' favour, with multiple offer situations occurring,
although less frequently than last year. The condominium market in Vancouver
was particularly active in the first quarter, attracting the interest of a
variety of purchaser groups such as baby boomers, first-time and move-up
buyers and investors.
The first quarter the year saw average house prices in Victoria increase
as the city's strong economy, high in-migration levels and affordable mortgage
rates maintained buyer demand. Also contributing to the increase in activity
of resale homes was the scarce availability, and high costs of rental units.
Victoria's market has moved away from the wild pace that characterized the
city for the past two years to balanced conditions, with an increase in
listing inventory.
Survey of Canadian Average House Prices in the First Quarter 2007
-------------------------------------------------------------------------
Detached Bungalows Standard Two Storey
-------------------------------------------------------------------------
Q1 2007 Q1 2006 Bungalow Q1 2007 Q1 2006 2 Storey
Market Average Average % Change Average Average % Change
-------------------------------------------------------------------------
Halifax 190,000 173,333 9.6% 200,000 197,000 1.5%
-------------------------------------------------------------------------
Charlottetown 145,000 142,000 2.1% 175,000 170,000 2.9%
-------------------------------------------------------------------------
Moncton 138,000 128,000 7.8% 132,000 125,000 5.6%
-------------------------------------------------------------------------
Fredericton 156,000 156,000 0.0% 187,000 191,000 -2.1%
-------------------------------------------------------------------------
Saint John 161,700 142,500 13.5% 210,400 188,700 11.5%
-------------------------------------------------------------------------
St. John's 145,000 143,667 0.9% 200,000 203,333 -1.6%
-------------------------------------------------------------------------
Atlantic 155,950 147,583 5.7% 176,750 173,833 1.7%
-------------------------------------------------------------------------
Montreal 221,583 210,167 5.4% 338,857 328,214 3.2%
-------------------------------------------------------------------------
Ottawa 298,083 281,333 6.0% 294,667 277,500 6.2%
-------------------------------------------------------------------------
Toronto 387,744 366,979 5.7% 489,889 467,742 4.7%
-------------------------------------------------------------------------
Winnipeg 191,375 171,109 11.8% 220,714 196,264 12.5%
-------------------------------------------------------------------------
Regina 158,500 141,125 12.3% 159,500 145,930 9.3%
-------------------------------------------------------------------------
Saskatoon 226,250 171,000 32.3% 257,500 189,000 36.2%
-------------------------------------------------------------------------
Calgary 402,933 311,878 29.2% 411,456 322,853 27.4%
-------------------------------------------------------------------------
Edmonton 350,000 225,500 55.2% 384,750 249,167 54.4%
-------------------------------------------------------------------------
Vancouver 758,000 668,500 13.4% 837,500 757,750 10.5%
-------------------------------------------------------------------------
Victoria 384,500 352,000 9.2% 418,000 399,900 4.5%
-------------------------------------------------------------------------
National 316,993 275,850 14.9% 378,148 338,228 11.8%
-------------------------------------------------------------------------
------------------------------------------
Standard Condominium
------------------------------------------
Q1 2007 Q1 2006 Condo %
Market Average Average Change
------------------------------------------
Halifax 144,000 113,000 27.4%
------------------------------------------
Charlottetown 100,000 98,000 2.0%
------------------------------------------
Moncton - - N/A
------------------------------------------
Fredericton 131,000 130,000 0.8%
------------------------------------------
Saint John - - N/A
------------------------------------------
St. John's 148,333 146,333 1.4%
------------------------------------------
Atlantic 130,778 119,111 9.8%
------------------------------------------
Montreal 204,929 193,857 5.7%
------------------------------------------
Ottawa 187,333 175,333 6.8%
------------------------------------------
Toronto 269,210 251,150 7.2%
------------------------------------------
Winnipeg 109,250 97,559 12.0%
------------------------------------------
Regina 102,500 94,500 8.5%
------------------------------------------
Saskatoon 155,000 108,500 42.9%
------------------------------------------
Calgary 261,336 188,167 38.9%
------------------------------------------
Edmonton 261,600 151,999 72.1%
------------------------------------------
Vancouver 403,500 353,000 14.3%
------------------------------------------
Victoria 248,000 223,000 11.2%
------------------------------------------
National 230,146 197,954 16.3%
------------------------------------------
Average house prices are based on an average of all sub-markets examined
in the area, except for the smaller markets of Charlottetown, Moncton,
Fredericton, Saint John and Victoria.
The Royal LePage Survey of Canadian House Prices is the largest, most
comprehensive study of its kind in Canada, with information on seven types of
housing in over 250 neighbourhoods from coast to coast. This release
references an abbreviated version of the survey, which highlights house price
trends for the three most common types of housing in Canada in 80 communities
across the country. A complete database of past and present surveys is
available on the Royal LePage Web site at www.royallepage.ca, and current
figures will be updated following the end of the first quarter. A printable
version of the first quarter 2007 survey will be available online on May 15,
2007.
Housing values in the Royal LePage Survey are Royal LePage opinions of
fair market value in each location, based on local data and market knowledge
provided by Royal LePage residential real estate experts. Historical data is
available for some areas back to the early 1970s.
About Royal LePage
Royal LePage is Canada's leading provider of franchise services to
residential real estate brokerages, with a network of over 12,600 agents and
sales representatives in 600 locations across Canada operating under the Royal
LePage, Johnston and Daniel, and Realty World brand names. Royal LePage
manages the Royal LePage Franchise Services Fund, a TSX listed income trust,
trading under the symbol "RSF.UN". For more information visit
www.royallepage.ca.
For further information: For the regional market highlights or to
contact a spokesperson, please contact: Tiffany Fisher or Kate Langan,
Mansfield Communications Inc., Phone: (416) 599-0024 or E-mail:
tiffany@mcipr.com or kate@mcipr.com
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