House prices in Canada increased by almost 7 per cent a year since 2000, according to ReMax, as tight inventories helped drive prices higher across the country.
The real estate brokerage examined sales data from 18 major Canadian markets and found that the annually compounded rate of return was 6.82 per cent. ReMax said the market has been skewed toward sellers for most of the last decade, except during 2008 and early 2009 when prices sagged through the recession.
“Strong seller’s/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values,” the report stated. “The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009. However, fewer listings served to offset diminished demand and provided greater stability.”
It reached that conclusion by examining monthly sales-to-new listings ratios – which indicate how much supply is on the market. More supply tends to mean lower prices, as sellers need to compete against each other to close deals.
From the report:
* “Western Canada experienced some of the highest rates of return for real estate over the 11-year period. While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average.
* Equally strong gains were posted in Quebec. While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis.
* Increases were more moderate in Ontario and Atlantic Canada – with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average. Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, and London-St. Thomas at 4.82 per cent.”
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