Canada's real estate market posted significant gains in the fourth quarter of 2007 and showed little sign of the traditional seasonal slowdown. Average house prices continued to increase in the fourth quarter with many markets experiencing double-digit gains, according to a House Price Survey report released today by Royal LePage Real Estate Services.
Of the housing types surveyed, detached bungalows increased to $337,555
(+11.6%), followed by standard two-storey properties, which rose to $399,738
(+11.3%), and standard condominiums, which increased in price to $240,395
(+11.7%), year-over-year.
"The fourth quarter 2007 was surprisingly strong, with unseasonably high price increases and unwavering demand," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. "The strength of the market was apparent throughout the country, largely due to positive economic fundamentals. The value and export-demand for our natural resources has underpinned high employment rates, providing Canadians with confidence in the future stability of their jobs and their local residential real estate markets."
Mirroring the pattern seen throughout most of 2007, it was the prairies that continued to dominate in price appreciation, with markets such as Regina and Saskatoon experiencing price increases as significant as 50 per cent. While agriculture is still a significant contributor to the regional economy, natural resources such as oil, gas, potash and uranium continued to drive exceptional growth in the area.
Homeowners in Saskatchewan saw property prices appreciate at a much higher rate than anywhere else in Canada, reflecting the relative affordability of homes in the region, and a shortage in supply relative to the booming demand for home ownership. The combination of a spike in the number of available jobs, the reasonable cost of living, and the attractiveness of the prairie lifestyle led to an unprecedented number of people searching for homes.
In Winnipeg, demand outstripped supply, prompting significant price increases. A sharp rise in new housing starts, high employment rates and several capital investment projects all contributed to the province's positive economic outlook. The increase in jobs also elevated consumer confidence and provided buyers with the ability to spend more on homes. Buyers entered the market eager to purchase properties before anticipated price increases occur.
Throughout the fourth quarter, Vancouver's population continued to surge, as the city held great appeal for both investors and newcomers to Canada. The availability of a variety of jobs associated with the 2010 Olympics helped maintain the strength of Vancouver's housing market, and continued to pressure house prices upwards.
In Alberta, the year end saw strong demand for more reasonably priced properties in resource rich Calgary and Edmonton; however, a surplus of inventory tempered activity levels and provided buyers with a selection of listings from which to choose. The rapid escalation of home prices in recent years has moderated demand and supports the current trend towards balanced conditions. This is in sharp contrast to the first quarter of 2007, when average house price increases in excess of 50 per cent were the norm in Edmonton.
The impact of the rise of Canada's dollar to parity with the US dollar was mitigated by the end of the fourth quarter, as the manufacturing sectors in Ontario and Quebec continued to adjust to the dollar's appreciation. Buyer activity levels in Central Ontario and Quebec remained strong and steady through the fourth quarter. In fact, Toronto displayed high levels of home buying activity in the fourth quarter, despite the city's rising house prices, partly related to the introduction of a new land transfer tax that will be implemented on January 1, 2008.
Within Atlantic Canada, Saint John reported the highest price gains in the fourth quarter, and was among the country's top five cities with the most significant price appreciations. In Saint John, it was the energy sector - which makes up more than half of the province's total exports - that continued to drive the city's economic vitality, luring both Atlantic residents and investors to the city's real estate market. Despite a restructuring of the Irving family's business assets, discussions persist about the development of a new $7 billion refinery in the Saint John area - a plan that would further solidify the province's reputation as the natural resource hub of eastern Canada.
Added Soper: "As we move into the new year, activity levels are expected to wane from the frantic pace that many regions of the country experienced in 2007; however, average prices are expected to continue to rise, albeit at a much more moderate pace. Canadian buyers and sellers can expect healthy, balanced conditions in 2008 - the best environment for a strong and sustainable real estate market."
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Detached Bungalows
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Q4 2007 Q4 2006 Bungalow
Market Average Average % Change
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Halifax $201,333 $188,667 6.7%
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Charlottetown $152,000 $145,000 4.8%
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Moncton $151,000 $147,100 2.7%
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Fredericton $155,000 $153,000 1.3%
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Saint John $196,500 $137,000 43.4%
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St. John's $157,667 $143,667 9.7%
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Atlantic $168,917 $152,406 10.8%
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Montreal $229,314 $217,500 5.4%
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Ottawa $308,583 $292,250 5.6%
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Toronto $413,375 $379,656 8.9%
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Winnipeg $214,494 $177,616 20.8%
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Regina $229,200 $150,375 52.4%
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Saskatoon $292,500 $188,500 55.2%
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Calgary $429,889 $408,833 5.2%
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Edmonton $336,786 $298,571 12.8%
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Vancouver $795,250 $707,500 12.4%
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Victoria $425,000 $380,000 11.8%
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National $337,555 $302,497 11.6%
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Standard Two Storey
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Q4 2007 Q4 2006 2 Storey
Market Average Average % Change
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Halifax $231,667 $199,333 16.2%
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Charlottetown $180,000 $175,000 2.9%
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Moncton $135,000 $130,000 3.8%
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Fredericton $197,000 $187,000 5.3%
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Saint John $255,000 $203,300 25.4%
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St. John's $219,333 $196,667 11.5%
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Atlantic $203,000 $181,883 11.6%
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Montreal $342,491 $319,573 7.2%
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Ottawa $306,500 $287,000 6.8%
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Toronto $506,900 $469,545 8.0%
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Winnipeg $237,571 $198,621 19.6%
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Regina $199,000 $146,500 35.8%
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Saskatoon $321,250 $205,000 56.7%
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Calgary $461,811 $425,644 8.5%
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Edmonton $370,000 $325,714 13.6%
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Vancouver $895,000 $803,500 11.4%
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Victoria $456,000 $417,000 9.4%
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National $399,738 $359,213 11.3%
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Standard Condominium
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Q4 2007 Q4 2006 Condo
Market Average Average % Change
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Halifax $148,500 $142,500 4.2%
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Charlottetown $100,000 $ 98,000 2.0%
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Moncton N/A N/A N/A
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Fredericton $126,000 $126,500 -0.4%
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Saint John N/A N/A N/A
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St. John's $165,000 $146,333 12.8%
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Atlantic $134,875 $128,333 5.1%
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Montreal $201,912 $191,179 5.6%
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Ottawa $196,833 $182,750 7.7%
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Toronto $280,505 $254,019 10.4%
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Winnipeg $124,270 $103,460 20.1%
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Regina $144,000 $ 96,500 49.2%
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Saskatoon $205,000 $124,000 65.3%
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Calgary $284,144 $259,400 9.5%
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Edmonton $240,500 $212,500 13.2%
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Vancouver $428,250 $386,000 10.9%
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Victoria $292,000 $238,000 22.7%
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National $240,395 $215,251 11.7%
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REGIONAL SUMMARIES
In the fourth quarter, Halifax experienced better than anticipated house rice appreciation, as sales figures and average house price increases ontinued to paint a picture of a healthy and well balanced housing market. ow levels of desirable properties in the popular Sackville, Dartmouth and edford neighbourhoods left little room for price negotiation, as buyers who ttempted to go-in below asking were largely denied entry into the market.
Moncton's economy continued to shine in the fourth quarter, leading to verage house price increases. High mineral tax revenues, a strong service-oriented economy and the grand opening of Molson Canada's new 35-million brewing facility continue to attract more buyers to an already tight housing market.
In Fredericton, the strong provincial economy, and economic impact of new commercial construction and the opening of several big box retail outlets drove consistent housing market activity in the fourth quarter.
Saint John is enjoying a streak of positive press, strong consumer confidence and exceptional year-over-year house price growth - three factors that have pressured house prices upwards across all housing types in the fourth quarter. Supply in the area continues to meet demand; however, with the increase in optimism related to growth in the Saint John area, this will only last for a short while longer.
Charlottetown's housing market saw moderate growth in the fourth quarter, as demand for lower-maintenance properties led to modest year-over-year house price increases. New office building developments being built in the city's core and a strong provincial economy have positively impacted the confidence levels of many area residents.
In St. John's, speculation over the bourgeoning natural resource economy and a second drilling project outside the Hebron Ben Nevis continued to lure buyers to the area. Several new businesses to the city, including two Starbucks coffee houses and several big box retailers, suggest the city is poised for sustained growth.
Strong demand for houses in Ottawa continued to fuel price increases in the fourth quarter. An anticipated shift in demographics to take place within the workforce over the next few ye