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House price appreciation across Canada to slow as more listings come on stream in 2007, says RE/MAX
MISSISSAUGA, ON, Oct. 18 / - Home buyers across the country will
breathe a sigh of relief in 2007, thanks to a nationwide influx of new
listings that is expected to slow price appreciation in major Canadian
centres, says a report released today by RE/MAX.
The RE/MAX Housing Market Outlook 2007 found that while the number of
homes listed for sale is set to climb, demand will remain strong in the 17
markets surveyed, including Vancouver, Victoria, Kelowna, Calgary, Edmonton,
Regina, Saskatoon, Winnipeg, Kitchener-Waterloo, Hamilton-Burlington, Toronto,
Ottawa, Montreal, Halifax, Charlottetown, Saint John and St. John's. With few
exceptions, projections for sales volume in 2007 match or fall short of peak
performance reported in 2005 and 2006, with more balanced conditions -
characterized by healthy inventory levels and less urgency in the market -
expected to emerge.
Nationally, 462,000 properties are forecast to change hands next year,
making 2007 the third best year on record. After four years of double-digit
gains, average price is predicted to climb a modest five per cent to 0,000
by year-end 2007, up from 5,000 one year ago. All but three of the markets
surveyed (Kitchener-Waterloo, St. John's, and Charlottetown) are predicting
further escalation in housing values, ranging from three to 10 per cent, in
2007.
"Strong economic fundamentals continue to fuel healthy residential real
estate activity in markets across the country, despite what is happening south
of the border," says Michael Polzler, Executive Vice President and Regional
Director, RE/MAX Ontario-Atlantic Canada. "We are heading into another year of
economic growth. Consumer confidence levels are strong. Unemployment levels
are forecast to remain low. Oil prices are expected to hover at per
barrel. The Canadian dollar continues to climb. The Bank of Canada is holding
the line on interest rate hikes. It's all positive."
Leading the country in terms of percentage increase in average price in
2007 are Calgary and Edmonton, with housing values rising 10 per cent to
5,000 and 5,900 respectively. Both markets experienced substantial
upward pressure in pricing during 2006 -with Calgary climbing 40 per cent to
0,000 and Edmonton rising 25 per cent to 1,750. Affordability is
eroding, particularly in Western Canadian markets, but consumers are adjusting
to new market realities.
"Affordability is one of the more serious issues facing today's real
estate consumer, yet purchasers remain steadfast," says Elton Ash, Regional
Executive Vice President, RE/MAX of Western Canada. "Buyers are simply getting
more creative in their approach to homeownership, considering alternatives to
single-detached homes such as semi and row housing, town houses, and
condominium apartments. They're also looking at peripheral areas located close
to the city centre that provide a better bang for the buck. New mortgage
products that extend the traditional 25-year mortgage amortization period to
30 and 35-years may also help them realize their goal of owning a home sooner
rather than later."
In 2007, the highest percentage increase in unit sales is expected to
occur in Saskatoon, where sales are forecast to climb seven per cent to 3,630
units. Edmonton is expected to place a strong second, with the number of homes
sold climbing five per cent to a record 21,300 units. Regina and
Hamilton-Burlington are tied for third place, both projecting a two per cent
increase in unit sales to 2,950 and 13,800 units respectively. Vancouver,
Kelowna, Winnipeg, Ottawa, and Saint John are all projecting sales volume on
par with last year's levels.
RE/MAX is Canada's leading real estate organization with over 16,690
sales associates situated throughout its more than 625 independently owned and
operated offices across the country. |
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