Canadian home prices, sales better than expected in 2011 | Toronto Real Estate Blog

Canadian home prices, sales better than expected in 2011

 

This year is turning out to be record-setting for Canada’s seemingly unstoppable housing market, despite all the economic gloom in the rest of the world.

And things aren’t expected to let up much in 2012, according to a report released Tuesday by Re/Max.

The average house in the GTA now costs $465,000, some 7 per cent more than last year. And prices are expected to climb a further 5 per cent to $488,000 by the end of 2012, Re/Max says.

A record 460,000 houses are expected to change hands in Canada by the end of this year and hit an all-time average high of $363,000, up 7 per cent from last year.

Re/Max forecasts Canadian house prices will climb another 2 per cent by the end of 2012, bringing the average house price to $371,000.

“The Canadian housing market has demonstrated tremendous resilience in recent years, but 2011 stands out,” Michael Polzler, executive vice president Re/Max Ontario-Atlantic Canada, said in a statement.

“Instead of responding to economic concerns both here and abroad with a retreat in sales and prices, residential real estate markets actually experienced an upswing in the volatile third and final quarters.”

While keeping a careful eye on unsettling world events like the eurozone crisis and the U.S. economic situation, “Canadian consumers are intent on making their moves now, in advance of higher housing values and rising interest rates down the road,” said Polzler.

Some 23 of 26 markets examined by Re/Max have seen significant price gains this year, topped by Vancouver where the average house price has climbed 16 per cent.

Prices there are expected to moderate, but still escalate another 4 per cent next year. That will see the average house price in Vancouver exceed $800,000 for the first time, the report notes.

Balanced conditions are expected to return to most Canadian markets as supply picks up to better meet demand, which should result in far fewer of the bidding wars that dominated the Toronto market this spring.

Calgary, Saskatoon and Halifax-Dartmouth are expected to lead the way in Canadian sales with projected increases of five per cent next year. Sales across the GTA are anticipated to grow about two per cent next year.

Polzler credited historically low interest rates as well as unexpectedly high demand for housing from younger Generation X and Y homebuyers for the continued health of Canada’s housing sector.

Baby boomers are starting to do their part, he added, by plunking for sale signs on the lawns of their family homes as they downsize into condos and smaller houses.

Immigration, population growth and demand from investors for hard assets in safe, stable countries also help explain why Canada just seems to be sailing through rough seas that have capsized other countries, says Polzler.

Britain’s venerable magazine The Economist recently suggested that Canada’s housing market is due for a correction.

It reported that we’re among nine countries in the world where housing is overvalued by 25 per cent or more right now and among four (including France, Australia and Belgium) where prices are in line with those in the U.S. “at the peak of its bubble.”

“There’s nothing on the horizon in Canada that we see that would lead to a significant correction,” said Polzler in an interview, noting that Canada also didn’t go through the massive upward surge in prices that has been the undoing of housing markets in the U.S. and Ireland.

“We see typically Canadian, steady Eddie growth going forward.”

 

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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