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Real estate market in recovery mode
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 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 for real estate. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in 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.
“Markets are heating up across the country,” says Michael Polzler, Executive Vice President, Re/Max Ontario-Atlantic Canada. “Purchasers are clearly taking 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.”
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), Regina (70.1), and Edmonton (69.2). Significant gains have also been made over the same period in markets such as Ottawa -- where homeownership levels rose from 51.4 per cent to 66.7 per cent -- and Toronto, where levels rose fro m 57.3 to 67.6 per cent.
“The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again,” says Elton Ash, Regional Executive Vice President, Re/Max of Western Canada. “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.”
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.
Public sentiment can 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.
Source: Re/Max Ontario-Atlantic.
September 24, 2009 | Permalink
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Comments
I don't see the connection between Ted and Thoreau....?
Posted by: Trevor | Sep 30, 2009 6:12:23 PM
Ah Thoreau -- the Ted Kaczynski of his day...
Posted by: Geoff | Sep 30, 2009 5:47:43 PM
Geoff, read "Walden's pond". A classic and must read for everyone. I wont change your mind, nope, but I don't pretend to think the same way as the crowds on things. Means I have a paid for rental and owe little on my triplex. All in all, I'm doing well thinking that debt on an asset is just as bad as a debt on liability regardless of it's worth or equity. A few more years and this way of thinking should set me free. By carrying debt, you always have an obligation outside of your own desires that must be serviced no matter your mood or motivation.
Posted by: Trevor | Sep 30, 2009 12:11:56 PM
Trevor I think we may just have to agree to disagree. Owing money on an asset does not negate it's value. As you say, a bum on the street may not owe anyone anything, but he has no place to live, either. In that comparison, I'm infinitely richer by any measure I think, but you think otherwise. Yet I don't think you'd switch places with him.
Posted by: Geoff | Sep 30, 2009 9:22:47 AM
I think you had my opinion set better the first time. Fact is that everyone needs a house and if you plan on owning a SFD for your entire life it's value is meaningless and it is not a store of wealth under this circumstance. Your own home can only be an asset if a) you plan to downsize to a cheaper location b) you plan to sell and rent in the future or c) you plan to take out a reverse mortgage and when it's maxed out die. Otherwise that "net worth" doesn't really exist because it can't be accessed. This is what I mean by we all start off in a negative net worth position at birth...because we need to organize our homestead first and foremost before we cash our nuts and plant our gardens.
My point is that debt is very common today and taken for granted. You can't really be free until you have your house paid for. Try reading your mortgage document, it's owned by the bank and you're merely renting the money. I have one sizable debt to go and then I'll be a bit more free. Imagine not owing anyone anything? You'd be rich by comparison to your friends.
Right now I have one account only and it's a HELOC and it has a large sum of money in the negative. I run off this balance. I have no money! A bum on the street has more than me...and yet my assets are worth more than the debt held against them...I'm still piss poor.
Posted by: Trevor | Sep 29, 2009 6:37:51 PM
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