Residential real estate markets across Canada post solid gains over past decade, says RE/MAX

Source: RE/MAX Decade in Review Report (1997-2007), 2/21/08 - RE/MAX of Western Canada (1998) Inc.

Kelowna, BC (February 21, 2008) – Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada, according to a report released today by RE/MAX.

RE/MAX Decade in Review 1997 - 2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return. Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year. Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007. Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period.

“Immigration and in-migration have played a serious role in jumpstarting residential housing markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade,” says Elton Ash, Executive Regional Vice President, RE/MAX of Western Canada. “At first, there was an influx of American buyers, especially in Canada’s coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback. Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by international standards. In recent years, there have been a growing number of purchasers from Mainland China. From a global perspective, there’s no question that Canadian real estate brings good value to the table.”

Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade, followed by St. John’s at 106 per cent, Kelowna at 84 per cent, and Saint John at 77 per cent. Most markets (12 of the 19 surveyed) reported increases between 40 and 60 per cent. Average price has also seen substantial escalation over the 10-year period, with posted gains ranging from a low of 54.4 per cent in London-St.Thomas to a high of 203 per cent in Edmonton. Appreciation in Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent.

In 2006, homeownership rates in the country were the highest on record at 68.4 per cent. Population growth has contributed to heated market conditions – especially in Calgary (+31.4 per cent), Edmonton (+20 per cent), Toronto (+20 per cent), and Vancouver (+15 per cent) where percentage increases have hovered in the double-digit range. Overall, Canada’s population rose to almost 33 million in the 2006 census, up approximately 10 per cent from 1996 figures.

“The non-cyclical nature of the decade comes as some surprise,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Never before have we seen such a continuous run up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation.”

Robust economic performance in Western Canada has also drawn job seekers from across the country, looking to capitalize on employment opportunities.

As demand for housing increased across the country, the supply of homes listed for sale began to contract. Multiple offers were commonplace in many areas, some with sales-to-listings ratios as tight as 80 to 90 per cent. Nationally, 1997 marked the first year since 1988 that the sales-to-listings ratio hit 50 per cent. The sales-to-listings ratio would remain above 60 per cent from 2001 onward – rising to as high as 68 per cent in 2002.

The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border. Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

RE/MAX is Canada's leading real estate organization with over 17,600 sales associates in more than 650 independently-owned and operated offices. The RE/MAX franchise network is a global real estate system operating in over 65 countries. More than 7,000 independently-owned offices engage nearly 115,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral and asset management.

RE/MAX Agents raise over $4 million

Press Release courtesy of RE/MAX of Western Canada

Kelowna, BC (February 5, 2008) – Housing sales and average price weren’t the only records being shattered across Canada in 2007. RE/MAX agents also set a new benchmark in charitable giving, raising over $4 million for the Children’s Miracle Network.

The 2007 donation surpassed the agents’ 2006 contributions by more than 14 per cent. Since 1992, RE/MAX sales associates nationwide have contributed close to $30 million to the cause. The 2007 break-down of contributions saw over $654,000 donated to the BC Children’s Hospital Foundation in Vancouver, over $322,000 raised for the Alberta Children’s Hospital Foundation in Calgary, over $327,000 contributed to the Stollery Children’s Hospital Foundation in Edmonton, over $65,000 towards the Children’s Health and Hospital Foundation of Saskatchewan in Saskatoon and over $150,000 given to the Children’s Hospital Foundation of Manitoba in Winnipeg.

"What many don’t realize is that the corporate and private sectors play a vital role in making miracles possible,” says Marie Sheppy, Senior Coordinator, Corporate Affairs, RE/MAX of Western Canada. “With public coffers stretched to the limit, it’s a fact that organizations like RE/MAX fund a significant portion of the required cost to treat sick and injured children in pediatric facilities across Canada. We work so hard because we know our donations mean more than dollars and cents—it's an opportunity for healthy, happy childhoods and hope for promising futures. There really is nothing more rewarding than watching kids just be kids.”

RE/MAX realtors generate donations through the RE/MAX Miracle Home Program®, whereby a portion of their commission earned on the purchase or sale of each home is given to Children's Miracle Network affiliated hospitals. Children's Miracle Network supports 14 children's hospitals and foundations across Canada. Donations are often maximized through additional fundraising events including golf tournaments, gala evenings with silent auctions, casual Fridays and much more. Funds raised in each community stay in that community to be invested in the local Children's Miracle Network hospital.

“It’s amazing what can be accomplished when people work toward a meaningful cause,” says Christine Martysiewicz, Director of Internal and Public Relations, RE/MAX Ontario-Atlantic Canada. “The synergy, commitment and enthusiasm of the RE/MAX network are truly phenomenal. However, what’s more amazing is that the charitable efforts undertaken by our realtors are 100 per cent voluntary. Supporting Children’s Miracle Network is a chance to make a real difference in the lives of local children and families in their own communities. That type of involvement is something that’s been woven into the fabric of the RE/MAX organization since its inception. The way we see it, we don’t just serve and work in these communities, we truly are a part of them, and we care—it’s that simple.”

In Canada, the funds raised on behalf of Children’s Miracle Network help support outreach programs and fund advancements in critical research, as well as upgrades to medical facilities and equipment.

“The outstanding generosity of RE/MAX Associates has helped more than 2.5 million Canadian children in 2007 alone – that’s 1 in 4 kids nationally,” says John Hartman, Chief Operating Officer – Canada, Children’s Miracle Network. “RE/MAX has made Children’s Miracle Network hospitals a vital part of what they do and continue to put giving back at the top of their agenda. Since 1992, RE/MAX has been a strong supporter of Children’s Miracle Network. Their dedication, passion and enthusiasm for the kids and families in their communities across Canada is outstanding. They continue to give and give more. We are very proud to be affiliated with RE/MAX. The progress being made thanks to contributions, like that from RE/MAX, has been nothing short of astonishing. While care and outcomes have improved significantly, it also remains a reality that the need has never been greater.”

In Canada, the children's hospitals/foundations receiving funding from Children’s Miracle Network are: BC Children's Hospital Foundation in Vancouver, Alberta Children's Hospital Foundation in Calgary, Stollery Children’s Hospital Foundation in Edmonton, Children’s Health and Hospital Foundation of Saskatchewan in Saskatoon, The Children's Hospital Foundation of Manitoba in Winnipeg, SickKids Foundation in Toronto, Children's Health Foundation in London, McMaster Children’s Hospital in Hamilton, Children's Hospital of Eastern Ontario Foundation in Ottawa, Operation Enfant Soleil (St. Justine’s Children’s Hospital, Montreal Children’s Hospital, Centre hospitalier universitaire de Québec (CHUQ) , IWK Health Centre in Halifax, and Janeway Children's Hospital Foundation in St. John's. For more information, visit: www.childrensmiraclenetwork.ca.

RE/MAX is Canada's leading real estate organization with over 17,600 sales associates in more than 650 independently-owned and operated offices. The RE/MAX franchise network is a global real estate system

operating in over 65 countries. More than 7,000 independently-owned offices engage nearly 115,000 member sales associates who 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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Some Forecast Notes... Winnipeg in 2008

Information courtesy of Peter Squire and Winnipeg Real Estate News

I have gotten a lot of questions lately about where I think the market is going to go... will it remain strong, balance out, or fall flat? Where the most sensible thing is to hope for a balanced market (if only to give those poor buyers a break!)... it looks like Winnipeg forges into 2008 with strong numbers, and even stronger hopes for another banner year.

I had missed the opportunity to attend our annual forecast breakfast this year due to prior commitments, but I did have the opportunity to speak with Peter Squire of Winnipeg Realtors Association who was a keynote speaker that day. He shared some great insight and information with me that I thought would be helpful to share.

First of all, lets consider statistics. I will share with you what we are looking at for 2008 as far as the forecast is spelled out in stats, and will also touch on last year's stat forecast and what the actual outcome was. Statistics are great because it breaks real estate numbers down to the basics, keeping it simple. Remember these are only forecast numbers, they are based on many different economical factors.

2008 Forecast

The amount of homes for sale: 0 - 2%
Home prices: 10 - 12%
Condo prices: 8 - 10%
Total MLS dollar volume: 12 - 14%

Now, lets look at what the forecast for 2007 was and what the real outcomes were

Forecast Actual
Amount of homes for sale: 0 - 2% 5%
Home prices: 8 - 10% 13%
Condo prices: 10 - 12% 7%
Total MLS dollar volume: 8 - 10% 19%

So we can see that 2007 played out almost better than expected, with the exception of condo sales we more than met our mark. With residential homes still dominating our market at over 74% there is no surprise there. It almost seems that condos in Winnipeg have not quite caught on the way they have in other major Canadian cities. Of course I am sure that will change as anyone can see the construction of new condos in Winnipeg.

Some other interesting points to consider is that consumer confidence and employment remain strong, we are experiencing positive population numbers and household growth, and construction intentions are high (we hit a 20 year high in 2007 for new home construction).

So what does this info mean and how can you apply it to your own personal house hunting experience? Obviously it depends on what category of buyer or seller you fall in. As a buyer, are you an investor, or looking for yourself? And as a seller, are you selling a family home, first time buyer home, investment property...? It is important to know your target market.

If you are an investor, you most of all will find this info useful. For non-investors, this may or may not help you, but the best advice I can give is to examine the numbers from 2007 and see how they came out higher than before... if 2008 will be the same then that means the best and cheapest time to buy is right now, or as soon as you can.

For sellers, right now it doesn't seem you have a lot to worry about.