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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.

Housing values,

however, continued to climb, with virtually all areas reporting an

upswing in average price, ranging from just under one per cent

to 15

per cent this year. Lower inventory levels in many markets offset the

effects of diminished demand, propping-up price in almost every

instance.

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

Ontario-Atlantic Canada.

The past decade was truly unprecedented"never

before have we experienced a run up that was as strong or lasted as

long.

As we have digressed from the typical pattern, people have

forgotten what the usual healthy cycle looks like, but all the hallmarks

are there.

Ample inventory levels, steady demand, and moderate growth,

both in terms of sales and prices, will characterize the market in

2011.

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.

Markets

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.

Low

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.

2011

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:

Land

scarcity, intensification, urban renewal, infill and renovation will

continue to drive up values"regardless of supply and demand"in major

metropolitan areas.

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

home-buying moves.

It is estimated that Canada will average 250,000 new

immigrants annually.

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

estate purchases.

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

centres.

REMAX Real Estate Forecast Outlook for 2011

Discussion

#1 By moncton real estate at 9/15/2011 9:43 PM

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