With all the talk of price corrections and soft landings, this year's spring housing market looks to be ignoring all the naysayers, says one of the country's largest real estate organizations.
Major Canadian real estate markets continued to show exceptional resiliency throughout the first quarter of the year, with strong demand and diminished supply setting the stage for a heated spring 2012, according to Re/Max Market Trends Report, released today.
The report, highlighting sales, price, trends and developments in 15 markets across the country, found that 12 of 15 Canadian centres) were reporting year-to-date (January-February) sales activity ahead of last year’s levels, with more than half reporting double-digit increases. Low interest rates, coupled with strong consumer confidence levels and a mild winter, played a significant role in the upswing, ushering in an early start to the spring market.
Average price climbed in 14 of 15 markets examined, yet appreciation was more tempered, with only three markets posting gains in excess of 10 per cent. Tighter inventory levels at entry-level price points have sparked bidding wars—particularly in Winnipeg and the Greater Toronto Area.
“Gains are, as predicted, much more moderate than in years past,” said Elton Ash, regional executive vice president, Re/Max of Western Canada. “We expect this will remain the trend moving forward—in line with the Canadian economy, as GDP growth also moves ahead at a more subdued pace. Conditions will vary locally, with some markets exceeding expectations, largely due to the fact that the significant influx of inventory expected never materialized or, in the case of Saskatchewan and Newfoundland, the local economy has shown extraordinary strength.”
In terms of sales appreciation, the best performing markets heading into the traditionally busy spring season were Halifax-Dartmouth (35 per cent), Saskatoon (21 per cent), Saint John (20 per cent), Regina (16 per cent), St. John’s (12.5 per cent), Greater Toronto Area (12 per cent), London-St. Thomas (11 per cent), and Edmonton (11 per cent). Only Vancouver, Kitchener-Waterloo, and Winnipeg have experienced softening in housing activity so far this year. Sales are down 16 per cent in the Greater Vancouver, 4.5 per cent in Kitchener-Waterloo, and almost on par in Winnipeg.
Year-to-date average price in most major centres is also on the upswing. Winnipeg ($241,115), Greater Toronto ($487,254) and St. John’s ($278,893) each posted a percentage increase of 10 per cent in the first two months of 2012. Values in Kitchener-Waterloo ($311,457) followed at nine per cent, while Regina ($290,006) and Saskatoon ($318,163) escalated six per cent.