Housing market to remain strong in 2010
OTTAWA — For evidence that Canada's experience of the recession was far different from that of our neighbours to the south one need look no further than this country's residential real estate market.
Not only will the market have recovered from the downturn by the end of 2009, in 2010 housing prices will grow in 91 per cent of major Canadian markets, according to a report released Thursday by Re/Max.
While the housing crisis in the U.S. helped bring on the economic downturn, Canada's residential market, in contrast, has "proven to be a safe harbour, with sales and average price expected to post gains in most major Canadian cities in 2009," the realtor's Housing Market Outlook for 2010 says.
By the end of the year, approximately 465,000 homes will have been sold in Canada than in 2008 — an increase of seven per cent, the report says. And the average price will have risen five per cent, to $318,000.
Each of those numbers is projected to grow by another two per cent in 2010, to 475,000 units sold at an average price of $325,000 — which would be a record in Canada.
"2009 was without question the year of the house," Michael Polzler, executive vice-president, RE/MAX Ontario-Atlantic Canada, said in a statement.
"Real estate not only defied industry and analysts' predictions in 2009 — its performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick-starting the national economic engine."
Polzler credits low interest rates for encouraging people to defy dire economic news and put money down on a home. According to the report, the average price of a house will have increased in 15 of the 23 markets measured.
In 2010, St. John's, N.L., is projected to see an 11 per cent increase in housing prices, the highest in the country. Western Canadian cities, which saw the biggest correction in 2009, will post five per cent gains, the report says.
"Some of the greatest percentage gains were reported in Western Canadian markets in 2009 — demonstrating the higher the peak, the lower the valley," said Elton Ash, Re/Max's regional executive vice-president for Western Canada. "That said, the recession barely registered on year-over-year activity in most major centres."
Factors that will keep the momentum going include an improving economy, low interest rates and rising consumer confidence, the report says.
Percentage changes in housing prices
2009 (estimated) 2010 (forecast)
Greater Vancouver 1 3
Victoria -2 5
Kelowna, B.C. -3 5
Edmonton -4 3
Calgary -5 5
Regina 7 6
Saskatoon -3 2
Winnipeg 5 4
Hamilton-Burlington, Ont. 3 4
Kitchener-Waterloo, Ont. 2 3
London-St. Thomas, Ont. 2 4
Ottawa 5 4
Sudbury, Ont. -6 0
Greater Toronto 5 4
Barrie, Ont. 0 1
St. Catharines, Ont. 1 1
Kingston, Ont. 3 3
Montreal 3 2
Quebec 8 6
Saint John, N.B. 6 4
Halifax-Dartmouth 3 2
P.E.I. 0 0
St. John's, N.L. 15 11
Canada 5 2
Source: CREA, Re/Max