The Canadian housing market showed exceptional resilience in 2011, according to Re/Max’s annual housing marketing outlook. Published early last week, the report states that an estimated 460,000 homes are expected to be sold this year, a significant increase over last year’s 44,010 properties.
Re/Max credits low interest rates for the housing market’s success, along with tight inventory levels and increased urban demand. And while the European debt crisis and worsening American recession continue to plague the global marketplace, it appears to have had little effect on the Canadian housing market. The country’s economic foundations actually grew in the past year, thanks to the addition of more than 200,000 jobs and slow but steady GDP growth. According to Re/Max’s report, economists are already looking forward to increased growth and renewed investment in 2012.
Looking Forward to 2012
The future of the residential housing market continues to look bright, with more than 88% of markets projecting an upward trend in average property price. After examining trends and developments in 26 major real estate markets across the country, Re/Max found that overall home sales are expected to remain on par, if not slightly ahead, of last year’s levels. Major centres like Saskatoon, Calgary, Winnipeg, Sudbury, and Hamilton-Burlington all boasted big numbers, with year-over-year gains of between 8% and 13%. The markets in Calgary and Saskatoon are expected to continue to lead the country in unit sales in 2012 with an additional 5% increase. The GTA, Moncton, and Regina are also project to perform well with anticipated gains of 3% each.
The Canadian Real Estate Association has also upwardly revised its housing forecast for 2011 and 2012, anticipating a 1.4% increase over last year’s sales numbers. The CREA still remains hesitant for 2012 however, forecasting a 0.5% decline for next year.
Other Highlights from the Report
The Re/Max report unveiled a number of interesting projections for the year to come, painting a rosy picture for potential first-time and move-up buyers. According to housing experts, stock in most major Canadian markets is expected to improve as municipalities focus on redevelopment and continue to fund downtown revitalization programs. Private investment is also expected to continue in Canada’s major centres, thanks to a renewed interest in income-producing properties. Vacancy rates are expected to drop as volatile markets influence sales moving forward.
Population growth and immigration numbers were two key factors expected to bolster housing demand in the coming years. According to statistics quoted in the report, Canada’s population has grown more than 11 percent since 2000, and there’s no sign of stoppage. This increasing population is expected to gravitate towards the nation’s urban hubs, creating an increased demand for condominium accommodations. This focus on higher density urban development is expected to have a major impact on purchasing patterns, resulting in the creation of more affordable housing options.
A Great Time to Buy
The assurance of relatively low interest rates along with rising home values, have helped to assure potential homeowners and inspire first time investors. Last week, the Bank of Canada announced that there would be no rate change in the near future, a move that will likely continue to fuel a competitive market and continued economic growth.
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