Housing market set to return to more normal levels of activity after summer
lull, says RE/MAX
Market for luxury homes remains brisk, in spite of soft summer
LAVAL, QC, Oct. 5 /CNW Telbec/ - Residential real estate markets across Quebec and the rest of Canada are set to return to more normal levels of activity after a brief summer pause, but most are unlikely to exceed robust sales posted in the final half of 2009, according to a report released today by RE/MAX.
The RE/MAX Market Trends Report Fall 2010, highlighting trends and developments in 19 major centres, found year-to-date sales (January to August) ahead of 2009 levels in 11 markets (58 per cent), including Montreal (+8 per cent). Prices were up year-over-year in all cities. Greater Montreal posted a nine per cent increase in activity, while five markets experienced double-digit gains in 2010 (Vancouver and St. John's up 16 per cent, Sudbury up 13 per cent, and Winnipeg and the Greater Toronto Area up 11 per cent). Balanced conditions prevailed in most markets (79 per cent), with St. John's, Kelowna, and Calgary declaring a firm buyer's market. By far the most interesting statistic reported was the significant upswing in upper-end sales in both smaller and larger centres between January and August of this year. While Greater Montreal reported a 20 per cent upswing in luxury sales, the clear leader was Sudbury at a 193 per cent increase, followed by Kelowna with a 163 per cent increase, Kitchener-Waterloo at 145 per cent, and Winnipeg at 104 per cent. Last but not least, despite a lot of hype, the threat of higher interest rates, tighter lending policies and the introduction of the Harmonized Sales Tax (HST) in Ontario and British Columbia had a nominal impact on the market. Economic uncertainty played a much greater role on softer housing conditions over the summer months.
"Purchasers are still sitting on the proverbial fence with regards to buying a home," says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. "But we expect many of those individuals will jump back into the fold in tandem with improving economic conditions. Overall, we expect a more subdued, but very healthy market going forward."
With the diminished risk of a W recession occurring, rebounding commodity and equity markets, and more positive economic data emerging daily, the outlook for the residential housing market has vastly improved over the past three months. Yet, markets are expected to record softer sales activity in the final quarter of the year, in comparison to the same period in 2009.
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UPPER-END SALES BY MARKET - YEAR-TO-DATE (AUGUST)
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Market 2010 2009 % +/- Price Point
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St. John's 48 30 60.0% $500,000
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Halifax-Dartmouth 355 277 28.2% $400,000
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Saint John 58 39 48.7% $350,000
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Greater Montreal 144 120 20.0% $1,000,000
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London-St. Thomas 234 151 55.0% $500,000
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Barrie 131 88 48.9% $500,000
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Greater Toronto 2,135 1,401 52.4% $1,000,000
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Hamilton 53 36 47.2% $750,000
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Kitchener-Waterloo 54 22 145.5% $750,000
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Sudbury 44 15 193.3% $500,000-$750,000
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Market 2010 2009 % +/- Price Point
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Ottawa 820 579 41.6% $500,000
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Winnipeg 188 92 104.4% $500,000
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Regina 91 53 71.7% $500,000
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Saskatoon 31 18 72.2% $750,000
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Edmonton 240 190 26.3% $700,000
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Calgary 242 194 24.7% $1,000,000
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Greater Vancouver 1,356 940 44.3% $1,500,000
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Victoria 172 134 28.4% $1,000,000
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Kelowna 29 11 163.6% $1,000,000
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Source: Local Real Estate Boards, RE/MAX
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"2009 defied logic in terms of residential housing activity. It was the best of times, it was the worst of times," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "Comparisons are difficult. We cleaned up in the first quarter of 2010 because housing activity during the same period one year earlier was dismal. We're now comparing the second half of the year to 2009 and falling short of expectations. Looking at the big picture however, the market remains healthy."
Average price is a major indicator of market stability. So far this year, every major centre has reported an increase in average price. Inventory levels are also an important part of the equation and the influx of listings that experienced in late 2008 have failed to materialize - a factor the will provide stability in the marketplace moving forward. In fact, in some markets, new listings are down year over year.
"Price appreciation continues to be solid," says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "In some markets, vibrant upper end sales certainly helped to buoy average prices. If anything demonstrates the underlying health of the national housing picture, it's the surge in sales of luxury properties this year. We know from experience that this segment of the market is usually the first to show pressure cracks when a market is softening- that has certainly not been the case this year, even during the summer slowdown."
As overall economic performance improves, so too will housing activity. In the months ahead, real estate markets across the country will head into more balanced territory, with a more stable pace emerging.
"The urgency characteristic of earlier this year has subsided, " says Dansereau. "An ample supply of homes exists across the board. Housing values are holding steady. Interest rates remain attractive. History will show sound market fundamentals supported another healthy year of residential real estate activity in 2010."
Highlights:
- All markets reported a surge of 20 per cent or more in upper end home
sales. Sixty-eight per cent of markets saw upscale home sales climb in
excess of 40 per cent, while 21 per cent boasted triple-digit gains.
- Sudbury led the country in sales appreciation, rising a significant 17
per cent year-to-date (1,876 units in 2010 vs. 1,599 in 2009).
- While virtually all markets reported softened activity over the summer
months, Winnipeg, MB saw 32 per cent of all homes sell in multiple
offers in August.
- Montreal was the sole market still experiencing seller's market
conditions, while Greater Toronto and Winnipeg were balanced, slightly
favouring the seller.
- First-time buyers led the charge in 58 per cent of markets, while move-
up purchasers dominated in 21 per cent of markets. The remainder
reported all segments working in tandem.
- Buyers were decidedly taking more time to make their decisions in
recent months, with many delaying their home-buying intentions. It is
expected that many purchasers sitting on the fence will make their way
back into the market on the heels of more positive economic news.
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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RESIDENTIAL AVERAGE PRICE BY MARKET - YEAR-TO-DATE (AUG.)
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Market 2010 2009 % +/-
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St. John's $249,263 $214,916 16.0%
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Halifax-Dartmouth $252,220 $237,886 6.0%
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Saint John $180,000 $176,000 2.3%
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Greater Montreal $288,923 $266,125 8.7%
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London-St. Thomas $227,794 $212,795 7.0%
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Barrie $265,455 $250,401 6.0%
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Greater Toronto $430,055 $385,978 11.4%
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Hamilton-Burlington $303,030 $291,775 3.9%
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Kitchener-Waterloo $300,774 $280,600 7.2%
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Sudbury $228,000 $202,000 12.9%
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Ottawa $326,666 $301,072 8.5%
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Winnipeg $242,000 $218,000 11.0%
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Regina $265,140 $246,559 7.5%
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Saskatoon $292,323 $278,193 5.1%
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Edmonton $332,789 $320,289 3.9%
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Calgary (Metro) $411,233 $388,302 5.9%
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Greater Vancouver $667,227 $574,061 16.2%
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Victoria $495,993 $457,698 8.4%
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Kelowna $418,598 $392,370 6.7%
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Source: Local Real Estate Boards, RE/MAX
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RESIDENTIAL UNIT SALES BY MARKET - YEAR-TO-DATE (AUG.)
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Market 2010 2009 % +/-
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St. John's 2,291 2,183 5.0%
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Halifax-Dartmouth 4,224 4,186 0.9%
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Saint John 1,436 1,550 -7.4%
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Greater Montreal 31,209 28,945 7.8%
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London-St. Thomas 5,985 5,688 5.2%
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Barrie 1,916 2,048 -6.5%
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Greater Toronto 62,930 58,421 7.7%
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Hamilton-Burlington 9,259 8,612 7.5%
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Kitchener-Waterloo 4,616 4,371 5.6%
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Sudbury 1,876 1,599 17.3%
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Ottawa 10,747 10,721 0.2%
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Winnipeg 8,620 8,663 -0.5%
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Regina 2,628 2,659 -1.2%
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Saskatoon 2,527 2,696 -6.3%
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Edmonton 11,773 13,694 -14.0%
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Calgary (Metro) 12,511 14,317 -12.6%
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Greater Vancouver 22,022 23,158 -4.9%
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Victoria 4,856 5,521 -12.0%
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Kelowna 2,728 2,523 8.1%
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Source: Local Real Estate Boards, RE/MAX
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For further information: David Barrett, Massy-Forget Public Relations, 514.842.2455 ext. 15; Eva Blay/Charlene McAdam, Point Blank Communications, 416.781.3911
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