Canadian Property Market on Fire: Q3 Royal LePage Housing Report

Good morning all.

More good news out of the housing sector from Royal LePage. The report covers the resale market from coast to coast, echoing what I reported about British Columbia’s market yesterday. Our booming economy, low unemployment, and high consumer confidence has fueled the market across the country, from Clayoquot Sound to Cape Spear. The report and regional summary for BC follows below. The whole report can be viewed here.

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