'Wild card' props up Canadian housing markets over past decade, says RE/MAX

Inventory remains key to stability in 2011

LAVAL, QC, Feb. 8 /CNW Telbec/ - Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released today by RE/MAX.

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010.  The report found strong seller's/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values. The lone exception was when the market dipped into buyer's territory during the latter half of 2008 and early 2009.  However, fewer listings served to offset diminished demand and provided greater stability. Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in Regina. Quebec City and Greater Montreal saw a return of 9.2 per cent and 8.48 per cent respectively.  The national average was 6.82 per cent.  By far the tightest market in the nation was Winnipeg, where seller's ruled the roost for 85 per cent of the decade, followed by Hamilton-Burlington (67 per cent), Regina (63.6 per cent), Kitchener-Waterloo (59.8 per cent) and Edmonton (57.5 per cent).

"There's no question that price appreciation has been solid over the past decade, in large part due to tight supply, but history tells us that exceptional growth supported by sound fundamentals is healthy," says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec.  "Concern is only raised when the underpinnings are insufficient to justify the trajectory. Canada's real estate markets measure up to conventional wisdom. Quebec markets, in particular, have performed exceptionally well since 2000, bolstered by job security, lower interest rates, and a growing belief in homeownership.  The next decade is expected to bring more of the same, with inventory once again playing a key role."

A number of city centres are already reporting stronger than usual housing activity out of the gate, with first-time buyers comprising the vast majority of purchasers and move-up buyers in close pursuit.  Quebec markets are no exception.  Demand and supply are on relatively even keel at present in most areas, but the traditionally busy spring season is expected to keep the market at a perfect equilibrium in the days and months ahead.  However, there may be some exceptions to the rule.  The country's largest markets— Greater Montreal , Greater Toronto , and Greater Vancouver—are expected to head into the second quarter with fewer listings overall.  Two centres—Newfoundland & Labrador and Kelowna—are still firmly entrenched in buyer's markets.

"Inventory has always been the wild card," says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.  "Its influence is remarkable, but a number of other factors will serve to bolster Canadian real estate moving forward including land scarcity, intensification, immigration, continued infrastructure and capital spending, improving money markets and the rebounding economy.  The threat of rising interest rates and the changes to mortgage lending may also prompt a flurry of activity affecting price growth in the weeks ahead.  Yet, overall, gains in 2011 will be more moderate than those noted in the past decade." 

Western Canada experienced some of the highest rates of return for real estate over the 11-year period.  While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average. 

Equally strong gains were posted in Quebec.  While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis. 

Increases were more moderate in Ontario and Atlantic Canada—with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average.  Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, and London-St. Thomas at 4.82 per cent. 

"An improved global economic picture, lower unemployment rates and rising consumer confidence have buoyed home buying activity since November," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.  "While sales figures are expected to be slightly off 2010's heated pace, housing values are forecast to continue to climb in Canadian real estate markets in 2011—with most a direct result of lower listing levels."

While the statistics are impressive, they alone cannot tell the tale.  The gains realized over the past decade speak to the tremendous resiliency of the Canadian residential housing market.  Considering catastrophic events, both natural and manmade, that occurred throughout the period—SARS, forest fires, ice storms, 9/11, a recession—the performance of the real estate sector proved that much more significant.  It remained a consistent bright spot supporting economic growth and ancillary spending, and subsequently helped lead the nation out of the greatest downturn in recent memory—its hardy nature heightening its appeal as a long-term investment.

RE/MAX is Canada's leading real estate organization 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 38th 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.

   Residential Average Price - Compound Annual Growth Rate (CAGR) by Market   
2000 - 2010

Market Avg. $
Avg. $

Newfoundland & Labrador $99,525 $235,341 8.14%
Halifax-Dartmouth $128,003 $253,610 6.41%
Moncton $89,065 $152,251 5.00%
Montreal $121,544 $297,621 8.48%
Quebec City $90,079 $237,240 9.20%
London-St. Thomas $135,857 $228,114 4.82%
Kitchener-Waterloo $157,317 $289,041 5.69%
Hamilton-Burlington $164,168 $311,683 6.00%
Greater Toronto $243,255 $431,463 5.35%
Ottawa $159,623 $328,439 6.78%
Winnipeg $88,553 $228,706 9.01%
Saskatoon $112,567 $296,293 9.20%
Regina $94,518 $258,023 9.56%
Calgary $176,305 $398,764 7.70%
Edmonton $124,203 $328,803 9.25%
Kelowna $168,551 $410,302 8.42%
Victoria $225,731 $504,561 7.59%
Greater Vancouver $295,978 $675,853 7.80%


CANADA $164,091 $339,030 6.82%

Source: CREA, TREB, Okanagan Mainline Real Estate Board, RE/MAX

Breakdown of Market Conditions by
Major Canadian Centre
2000 - 2010
Market Buyer's

Newfoundland & Labrador 35.6 % 36.4 % 28.0 %
Halifax-Dartmouth 6.8 % 43.2 % 50.0 %
Moncton 11.4 % 58.3 % 30.3 %
Greater Montreal 18.2 % 45.5 % 35.6 %
Quebec City 6.1 % 36.4 % 47.7 %
London-St.Thomas 10.6 % 57.6 % 31.8 %
Kitchener-Waterloo 3.0 % 37.1 % 59.9 %
Hamilton-Burlington 3.0 % 29.5 % 67.4 %
Greater Toronto 10.6 % 54.5 % 34.9 %
Ottawa 6.8 % 49.2 % 43.9 %
Winnipeg 0.8 % 14.4 % 84.8 %
Saskatoon 8.3 % 43.2 % 48.5 %
Regina 7.6 % 28.8 % 63.6 %
Calgary 16.7 % 36.3 % 47.0 %
Edmonton 12.1 % 30.3 % 57.6 %
Kelowna 32.6 % 44.7 % 22.7 %
Victoria 12.1 % 31.1 % 56.8 %
Greater Vancouver 12.9 % 31.8 % 55.3 %
CANADA 9.9 % 49.2 % 40.9 %

Source: CREA, TREB, Greater Montreal Real Estate Board, Quebec Real Estate Board, Okanagan Mainline Real Estate Board
Note: Stats were not available for Quebec City for 2008. Stats were not available for Greater Montreal for June 2008.


For further information:

Frédérique Henry/Maude Bujeault Bolduc     
Massy-Forget Public Relations  
514-842-2455 ext. 23/28     
Eva Blay/Charlene McAdam  
Point Blank Communications

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