Residential real estate markets across Canada post solid gains over past decade, 
says RE/MAX

"Pent-up demand, population growth, tight inventory levels, and the longest economic
expansion since World War II collectively fueled one of the best decades on record for
residential real estate in Canada, according to a report released by RE/MAX.

RE/MAX Decade in Review 1997 - 2007 found that major housing centres across the country
experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward
while unit sales climbed in tandem as more and more Canadians bought into homeownership.
Nationally, average price almost doubled in the 10-year period, rising from $154,606 in
1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return. Home
sales across the country increased just over 57 per cent from 331,092 units in 1997 to
more than half a million sales last year. Edmonton led the country in terms of percentage
increase in average price. The city saw a 203 per cent upswing in housing values - or an
11.7 per cent increase annually - with average price rising from $111,587 a decade ago to
$338,636 in 2007. Prince Edward Island experienced the highest percentage increase in unit
sales, with the number of homes sold up 119 per cent in the 10-year period.  

Immigration and in-migration have played a serious role in jumpstarting residential
housing markets, particularly in British Columbia, Alberta, and to some extent,
Saskatchewan over the past decade. At first, there was an influx of American buyers,
especially in Canada’s coastal regions and recreational hot spots, as our southern
neighbours took advantage of the almighty US greenback. Then the European and Middle
Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by
international standards. In recent years, there have been a growing number of purchasers
from Mainland China. From a global perspective, there’s no question that Canadian real
estate brings good value to the table.

Percentage increases in home sales varied across the country, with Prince Edward Island
experiencing the greatest upswing over the past decade, followed by St. John’s at 106 per
cent, Kelowna at 84 per cent, and Saint John at 77 per cent. Most markets (12 of the 19
surveyed) reported increases between 40 and 60 per cent. Average price has also seen
substantial escalation over the 10-year period, with posted gains ranging from a low of
54.4 per cent in London-St.Thomas to a high of 203 per cent in Edmonton. Appreciation in
Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking
second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon
at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver
at 99 per cent.

In 2006, homeownership rates in the country were the highest on record at 68.4 per cent.
Population growth has contributed to heated market conditions – especially in Calgary
(+31.4 per cent), Edmonton (+20 per cent), Toronto (+20 per cent), and Vancouver (+15 per
cent) where percentage increases have hovered in the double-digit range. Overall, Canada’s
population rose to almost 33 million in the 2006 census, up approximately 10 per cent from
1996 figures.  
 
The non-cyclical nature of the decade comes as some surprise. Never before have we seen
such a continuous run up in Canadian real estate. Clearly, strength in all markets has
been directly linked to solid growth in local, provincial and national economies. Low
interest rates, job security, and consumer confidence have all served to further bolster
home-buying activity across the nation.

Robust economic performance in Western Canada has also drawn job seekers from across the
country, looking to capitalize on employment opportunities.

As demand for housing increased across the country, the supply of homes listed for sale
began to contract. Multiple offers were commonplace in many areas, some with
sales-to-listings ratios as tight as 80 to 90 per cent. Nationally, 1997 marked the first
year since 1988 that the sales-to-listings ratio hit 50 per cent. The sales-to-listings
ratio would remain above 60 per cent from 2001 onward – rising to as high as 68 per cent
in 2002.       

The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11,
SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural
disasters such as ice storms, hurricanes, and forest fires and more recently, the credit
crunch south of the border. Given the continuation of sound economic fundamentals, it’s
expected that residential real estate markets across the country will continue to
experience healthy activity, albeit at a more moderate pace." 

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RE/MAX of Western Canada (1998) Inc. Decade in Review issued February 21, 2008.