A new study of the Canadian housing market shows the past decade has been one of the strongest on record with consistent, consecutive growth in major centres across the country.
RE/MAX's Decade in Review study finds that the average price of homes across Canada almost doubled, rising from $154,606 in 1997 to $307,265 in 2007.
And home sales increased by more than 57 per cent across the country in that same period, rising from 331,092 unit sales in 1997 to more than half a million last year.
"In recent memory we have not seen 10 consecutive years of growth in the real estate market and what's been very interesting is right now there are no signs of it slowing down," said Michael Polzler, executive vice president of RE/MAX.
He told CTV's Canada AM he attributes the strong growth in large part to low interest rates.
"These days you can get a variable rate mortgage for about 5 per cent," Polzler said.
"That makes it very easy for Canadians to get into a new home. When you combine that with great employment across Canada, people are buying houses."
One of the surprises to come out of the report, Polzler said, was that the market has grown consistently over the past 10 years. Typically, markets follow a cycle that involves at least some decline, but house prices have increased steadily in almost every market across Canada over the past decade.
The study found:
- Edmonton led the country with an 11.7 per cent annual increase in housing values, rising from $111,587 in 1997 to $338,636 in 2007.
- P.E.I. experienced the highest percentage increase in unit sales. The number of homes sold was up 119 per cent.
- The average price of homes has seen substantial gains, with London, Ont. posting a low of a 54-per-cent increase in average price over the past decade, to a high in Edmonton, of 203 per cent.
- Markets in Western Canada saw the biggest jump in price appreciation. Calgary's prices rose 189 per cent, Kelowna posted 179 per cent, Saskatoon had 137 per cent, Winnipeg had 118 per cent and Victoria posted 114 per cent price appreciation between 1997 and 2007.
Canada avoids U.S. slump
Polzler said Canada has been protected from the real estate slump currently underway in much of the U.S. by more conservative lending practices, job security and the fact Canadians have done well at paying off their mortgages ahead of schedule.
"We also, although our market has been excellent, we have not seen the very, very high price increases some U.S. markets have seen," he said.
And Polzler said he doesn't see the pace slowing down any time soon.
"We see it continuing for the foreseeable future. Right now as long as interest rates stay low and as long as employment stays strong, we think the housing market is going to remain excellent."
A recent report from Statistics Canada also marked steady growth in the real estate market, though on a smaller scale. The New Housing Price Index found that November was the fifteenth straight month that the 12-month rate of growth in new housing prices held steady.
Overall, prices rose 0.5 per cent between October and November of last year, resulting in a New Housing Price Index of 156.5.
Contractors' selling prices rose 6.1 per cent between November 2006 and November 2007, unchanged from the year-over-year increase in October.
Saskatchewan continues to lead the pack in regional year-over-year inflation, reporting a new housing price increase of 47.9 per cent for November. This monthly increase showed no change from October.
