Michael Cowling

Canadian housing markets buck recession
and trend upwards, says RE/MAX

With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by RE/MAX.

The RE/MAX Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in unit sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421). Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.

The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again. In terms of its impact on the resale market, by historical standards, this recession was one of the mildest. The resilience of bricks and mortar has been demonstrated time and again. While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.

The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates -- Calgary (74.1), St. John’s (71.5), and Regina (70.1). Significant gains have also been made over the same period in markets such as Ottawa, where levels rose from 51.4 per cent to 66.7 per cent, and Toronto, where levels rose from 57.3 to 67.6 per cent.

Public sentiment can perhaps best be illustrated by a recent Angus Reid Omnibus Survey* that asked the question “In which do you feel more comfortable investing your money? The stock market or real estate.” Out of 1,000 respondents from coast-to-coast, 77 per cent chose real estate. The results of the RE/MAX Bricks and Mortar Report are clearly representative of this national dynamic at work.

Markets are heating up across the country as purchasers take advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward homeownership is expected to continue throughout the Fall and possibly into early 2010.

Over the past thirty years, the Canadian residential real estate market has experienced three major downturns – 1981, 1989, and 2008. While there have also been regional fluctuations throughout the years, return on investment over this period has been substantial, with Vancouver, Victoria, Toronto, Regina and Ottawa leading the country in terms of price appreciation.

The overall stability of real estate as an investment has also played a role. Markets like Halifax-Dartmouth, Regina, Ottawa, Winnipeg and London have provided steady returns (especially in recent years), with minimal fluctuation.

* The Angus Reid Omnibus Survey was conducted on September 15, 2009 and yields a margin of error of +3.1 per cent, 19 times out of 20.


Homeownership Rates
Canada and Major Centres
1981 2006
Canada 62.1 68.4

Metropolitan Areas*
St. John’s 69.5 71.5
Halifax 55.6 64.0
Ottawa 51.4 66.7
Toronto 57.3 67.6
London 58.0 65.9
Winnipeg 59.1 67.2
Regina 65.4 70.1
Calgary 58.4 74.1
Edmonton 57.9 69.2
Vancouver 58.5 65.1
Victoria 59.8 64.7

Source: Canada Mortgage and Housing Corporation (May 2008)
*Homeownership rates based on 1986 boundaries for the Census Metropolitan Area (CMA)

Top Performing Markets by Price Appreciation
1980 YTD 2009 % Increase
Market Avg. $ Avg. $ 1980 - 2009
Greater Vancouver $100,065 $574,061 473.7%
Victoria $85,066 $466,611 448.5%
Greater Toronto $75,694 $385,978 409.9%
Regina $48,628 $244,088 402.0%
Ottawa $63,177 $301,684 377.5%
Halifax-Dartmouth $53,161 $239,633 350.8%
Winnipeg $50,491 $207,006 310.0%
Calgary $93,977 $380,489 304.9%
London – St. Thomas $55,210 $213,683 287.0%
Newfoundland & Labrador $52,768 $203,584 285.8%
Edmonton $84,623 $319,939 278.1%

Canada $67,024 $312,585 366.4%
Source: Canadian Real Estate Association (CREA), RE/MAX