REMAX Western Canada real estate forecast for 2011
The RE/MAX Housing Market Outlook 2011, examining trends and
developments in 26 major centres across the country, found that
home-buying activity in 2010 fell short of 2009 levels.
however, continued to climb, with virtually all areas reporting an
upswing in average price, ranging from just under one per cent
per cent this year. Lower inventory levels in many markets offset the
effects of diminished demand, propping-up price in almost every
Kitchener-Waterloo, Quebec City, and St. John's saw the
greatest increases in average price this year, while Eastern Canadian
markets including Hamilton-Burlington, Sudbury, Windsor, Moncton and
Prince Edward Island were the only markets that bucked the downward
trending in home sales in 2010.
By year-end, approximately 441,000
homes are expected to change hands nationally, a five per cent decline
from the 465,251 sales reported in 2009.
Housing values are forecast to
continue to climb, up an estimated seven per cent to $340,000, compared
with $320,333 one year earlier.
Looking forward, we see steady
improvement in provincial and local economies " which will bode well for
housing markets across the board, says Elton Ash, Regional Executive
Vice President, RE/MAX of Western Canada.
The relentless drive in the
market reminiscent of years past will be gone and instead, we can expect
to see more normal, balanced market conditions, with buyers maintaining
a slight edge.
Greater stability is expected to characterize the
markets in 2011, with Canadian housing sales predicted to mirror 2010
levels at 441,000 next year, while average price is forecast to escalate
three per cent to $350,000 by year-end 2011.
In terms of resale
housing activity, what many are talking about as the new normal is
actually a return to the traditional real estate cycle, says Michael
Polzler, Executive Vice President, Regional Director, RE/MAX
The past decade was truly unprecedented"never
before have we experienced a run up that was as strong or lasted as
As we have digressed from the typical pattern, people have
forgotten what the usual healthy cycle looks like, but all the hallmarks
Ample inventory levels, steady demand, and moderate growth,
both in terms of sales and prices, will characterize the market in
While the pace may appear lackluster in comparison to what we've
grown accustomed to, it underscores the principles of real estate 101:
The market is cyclical.
All boats rise and fall with the tide.
in British Columbia are forecast to lead the country in terms of
percentage increases in sales activity next year, with Greater Vancouver
expected to climb 10 per cent, followed by Victoria at eight per cent
and Kelowna at six per cent.
After a prolonged period of economic
hardship, Windsor is once again on track for growth, with residential
home sales predicted to climb five per cent.
Almost all markets
are reporting an anticipated increase in housing values next year, with
St. John's in Newfoundland-Labrador in front with an estimated eight per
cent hike in average price in 2011.
The value of homes in Greater
Vancouver, Kelowna, Regina, Saskatoon, London-St. Thomas, Ottawa,
Sudbury and Greater Montreal is also predicted to climb five per cent.
interest rates and improving consumer confidence levels should
stimulate home-buying activity at all price points next year, says
Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. Overall
gains will be more muted -- a welcome reprieve for purchasers.
will be a year that will see more widespread recovery across a broader
array of economic sectors, setting the stage for a better 2012. In the meantime, a number of factors will continue to support sustained sales and price growth in the months and years ahead:
scarcity, intensification, urban renewal, infill and renovation will
continue to drive up values"regardless of supply and demand"in major
The Canadian housing stock is ever-evolving,
particularly in the central core of each city.
With average price
pushing closer to or well past the $300,000 mark in the vast majority of
major centres, and affordability of single-family homes diminishing,
the demand for attainable product will rise in tandem, bolstering the
growing condominium segment in the years ahead.
The upper-end of
the market continues to be a strong indication of the overall health of
Canada's housing sector.
Typically the first segment to soften in a
downturn, luxury homes posted record sales activity in 2010, and demand
is expected to remain solid in 2011.
Strong sales in the high-end will
continue to prop up average prices.
Immigration will remain a
serious force stimulating demand, particularly given the penchant for
homeownership among today's new Canadians.
While the formation of new
households used to take an average of five years, a growing number of
newcomers arrive skilled, financially secure, and ready to make their
It is estimated that Canada will average 250,000 new
In the year ahead, federal, provincial and
local stimulus in the form of continued infrastructure spending and
capital projects will be a considerable boon to economic stability and
employment, providing consumers the confidence to move forward with real
Volatility in the money markets will continue
to drive buyers to the tangibility of homeownership, both as a reliable
long-term investment and a form of shelter, particularly given low
vacancy rates and a lack of new rental construction in a number of major