Despite the cyclical nature of the business, an analysis of 17 housing
markets across the country found that price appreciation topped 240 per cent
in seven areas, including Barrie (372 per cent), St. Catharines
(329 per cent), Hamilton-Burlington (325 per cent), Ottawa (297 per cent),
Greater Toronto Area (290 per cent), Greater Vancouver Area and
Halifax-Dartmouth (242 per cent increase). Victoria reported a 229 per cent
increase, London experienced an upswing of 228 per cent, Calgary was up 227
per cent, and Kelowna rounded out the top 10 at 211 per cent.
"The results are nothing short of remarkable, given the economic
volatility of the marketplace in the past 25-year period," says Elton Ash,
Regional Executive Vice President, RE/MAX of Western Canada. "This is
especially true in recent years when serious external factors such as 9/11,
SARS, and an outbreak of forest fires barely registered on housing activity.
Any one of these disasters would have had a significant impact on real estate
markets in the 1980s."
Nationally, average price appreciated 264 per cent (11 per cent annually)
in the 25-year period, rising from $76,021 to an estimated $277,000 in 2006.
Although a number of factors contributed to the substantial upswing in values,
perhaps the greatest influence was a 25 per cent increase in Canada's
population (which rose from 24,820,393 to a projected 31,021,251 in 2005).
"Conventional wisdom used to be that real estate was a relatively safe,
long-term investment that typically appreciates at a rate of five per cent
annually," says Michael Polzler, Executive Vice President and Regional
Director, RE/MAX Ontario-Atlantic Canada. "These statistics clearly tell a
different tale. In the top ten markets, real estate values rose at least eight
per cent or more on an annual basis. Even the worst performing market in the
country experienced an increase of close to six per cent annually since 1981."
Thanks to economic diversity, today's housing markets are more insulated
than in the past. Alberta's pro-business stance, for example, has served to
attract major corporations to the province in recent years. Saskatchewan's
economic base has shifted from agriculture to natural resources virtually
overnight. In Ottawa, an economy once solely dependent on the one major
employer in the area, the evolution of high-tech has played a substantial role
in the overall health of the residential real estate market.
Baby Boomers have also been a powerful force behind housing demand,
explains Ash, particularly in the upper end where sales have surged in recent
years. "Boomers have demonstrated their buying intentions through the purchase
of primary residences, recreational and retirement properties and even in
financially assisting their children - the next generation of homebuyers
-thereby stimulating the first-time segment as well."
"Immigration has also bolstered residential home sales, particularly in
Canada's largest cities," says Polzler. "Approximately 250,000 new Canadians
arrive annually and we know from experience that many will buy a home within
five years of immigrating. Job opportunities have also prompted in-migration
across the country as purchasers from more rural communities seek employment
in major metropolitan areas."
RE/MAX is Canada's leading real estate organization with over 16,880
sales associates situated throughout its more than 630 independently owned and
operated offices across the country. The RE/MAX franchise network, now in its
33rd year of consecutive growth, is a global real estate system operating in
over 63 countries. More than 6,740 independently owned offices engage 119,400
member sales associates who lead the industry in professional designations,
experience and production while providing real estate services in residential,
commercial, referral, relocation and asset management. For more information,
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