IF you're in the market for a new house, now may just be the right time to buy.
According to a new report released by RE/MAX, residential real estate markets in cities across the country are poised for growth in the last few months of 2009.
While the recession has certainly had an impact on the Canadian economy, its impact on the real estate market was far less than what was originally predicted. The positive strides that the market has been making since the spring has made this recession "one of the shortest on record" for real estate, according to RE/MAX. And that's due to continued low interest rates, pent-up demand after years of a strong seller's market and improvement in affordability levels.
"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."
Many real estate markets across the country have reported strong percentage increases in sales, such as Vancouver, which was up 14 per cent from January to August. Housing values have increased above 2008's record-breaking levels in 11 markets. Winnipeg is one of those markets, with the average price increasing 3.5 per cent from one year ago to $207,006. Nationally, the average price is $312,585, which is up 0.5 per cent from 2008.
According to RE/MAX, the recovery of the housing market in the face of a recession speaks volumes about the importance of home ownership and the value of investing in real estate. When asked whether they felt more comfortable investing their money in the stock market or real estate, 77 per cent of 1,000 respondents across the country chose real estate in a recent Angus Reid Omnibus Survey.
"The resilience of bricks and mortar has been demonstrated time and again," says Ash. "While there may still be some challenges down the road, the worst is definitely behind us in the housing industry."
Canada's housing market has faced major challenges three times in the last 30 years -- in 1981, 1989 and 2008. While many markets feel the effects of the downturn significantly, such as higher-priced markets like Vancouver and Toronto, markets like Winnipeg have been proven to provide steady returns with few ups and downs, even in the shadow of a recession.
Despite the steadiness of our real estate market, it's interesting to look back at the history books to see just where we've come over the last few decades. In 1980, the average price of a home in Winnipeg was $50,491. That has increased a whopping 310 per cent in almost 30 years, to the present average value of $207,006.
While we may be nowhere near the 473 per cent growth that Vancouver has experienced, growing from an average $100,065 in 1980 to $574,061 today, Winnipeg has shown a higher percentage increase in average price than cities like Calgary and Edmonton. Average prices in those cities grew by 304.9 per cent and 278.1 per cent respectively since 1980.
Home ownership across Canada has also increased steadily over the last few decades. Overall, 68.4 per cent of Canadians owned their own home in 2006, the most recent statistics in the RE/MAX report, as compared to 62.1 per cent who owned a home in 1981. That increase has been even more significant in Winnipeg, where home-ownership rates have increased from 59.1 per cent in 1981 to 67.2 per cent in 2006. Home-ownership rates are highest in Calgary, where 74.1 per cent of people own their own home.
Looking ahead, the future looks bright for real estate markets across the country. Now that the impact of the recession has been less than expected, RE/MAX predicts that the industry will close on a high note for 2009.
"Markets are heating up across the country," notes Michael Polzler, executive vice-president, RE/MAX Ontario-Atlantic Canada. "Prices are on the upswing and inventory levels are tightening, so the push toward home ownership is expected to continue throughout the fall and possibly into early 2010."
