Real estate prices still rising
Unwavering Demand Supports Rising Canadian House Prices in Third Quarter
TORONTO, September 27, 2007 – Canada’s real estate 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 real estate prices to rise in all major markets, year-over-year, according to a House Price Survey report released today.
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 real estate 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 real estate market. 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.â€
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 real estate 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 real estate 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.â€
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 real estate 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 real estate 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 real estate 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.
Toronto’s real estate market continued to blaze trails in the third quarter with record-breaking activity levels and average house price increases, driven primarily by a surge in buyers in the city. As one of the world’s leading cities, Toronto’s real estate market is made up of a host of buyers. The traditional homebuyer, typically a married couple, family or single person, has morphed over the last few years. Today’s buyer pool has now grown to include friends or even colleagues buying a property together as an affordable means to building equity, while satisfying their living needs. Despite the tight market in the city’s core, Toronto’s and the surrounding area’s real estate market is moving toward more balanced conditions.
————————————————————————————————————
