Canadian Housing Price Survey and Forecast Released

Royal Lepage recently released their Market Survey Forecast and House Price Survey which found that it Canada’s resale housing market had recovered lost ground in Q2 2009 and is well positioned to stabilize for the remainder of the year, after a very slow start.

As the economy begins to stabilize and consumer confidence improves, house prices are expected to appreciate slightly in much of eastern and central Canada. Greater than national average price declines are predicted for the western cities that saw the greatest price inflation earlier in the decade, including Edmonton, Calgary and Vancouver.

“Given the grim shape that Canada’s real estate market was in this past winter, the turnaround we have witnessed in the second quarter is really quite remarkable. We believe this improvement represents a sustainable change across the country. While seasonally weaker conditions are to be expected in the fall, the plucky Canadian real estate market is stabilizing and a healthy level of activity is forecast for the second half of 2009,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

During the second quarter, average house prices across most Canadian markets began to appreciate, recovering from the lows experienced during the winter months. Average national prices remain slightly behind those posted during the same period in 2008. Of the housing types surveyed, the price of detached bungalows declined to $327,964 (-3.5 per cent), two storey property prices decreased to $392,378 (-3.7 per cent), and standard condominiums price points fell slightly to $236,612 (-4.0 per cent), year-over-year.

Soper observed, “With our industry’s busiest quarter behind us, we feel comfortable revising our 2009 forecast to the positive. When the anticipated market decline struck last winter, it was with greater speed and intensity than predicted, but the strength of the rebound was equally surprising. If general economic conditions continue to improve, as we expect they will, 2009 will be characterized as a period of moderate housing market correction after several years of above-average price growth.”

The 2009 national average house price is forecast to decline marginally by 2.0 percent, to $297,500 by end of year and unit sales are projected to fall slightly by 1.0 percent to 430,000.

“Improved affordability, driven by flat or lower home prices and inexpensive mortgage financing, has been the principle catalyst in this recovery. Pent up demand is also a factor in the lift we see in the second quarter numbers. For six months straddling the year’s beginning, buyers stayed away from the market in an understandable, emotional reaction to very unsettled global economic conditions. Canadians appear to be stepping beyond these fears and are once again moving onto and up the home ownership ladder,” stated Soper.

In early 2009, the precipitous drop in unit sales remains the most dramatic indicator of the recession’s impact on Canada’s real estate market. With spring, consumers appeared ready to believe the worst was behind them and returned to the market in force, driving increased activity across each housing type. Couple this with historically low interest rates and leveling unemployment, Canada’s residential real estate market got back on track during the quarter.

Undergoing an inevitable cyclical correction, price adjustments can be seen with marked variances across Canada’s provinces. As expected, British Columbia and Alberta posted the most significant price modifications, as home values in those markets retreated in the wake of several mid-decade years of unsustainable price inflation, and have now evolved to a more balanced state. Prices appear to have stabilized and it is expected that these regions will continue to see improvements into 2010. In particular, the impact of lower home prices has improved affordability to the point that people are buying homes again on the West Coast, where sales activity has increased substantially.

Alternatively in Atlantic Canada, homes continue to appreciate due to strong local economies, which have helped to shelter the region somewhat from the turbulence witnessed in other provinces. As well, the region’s generally moderate home prices have helped keep demand strong. Newfoundland, in particular, stands out as a region that continues to see significant home price appreciation, as supply cannot keep up with the demand driven by vibrant and growing industries such as those in the province’s oil and gas sector.

Meanwhile, home prices in Toronto declined slightly in the second quarter, reflecting the national average trend. In the early spring, it was first-time buyers who triggered the increased activity levels, now those looking to move up are also active in the market. Similar to the situation in other large cities in central Canada, the most desirable neighbourhoods experienced supply shortages, which put upward pressure on prices.

“Looking ahead to the second half of 2009, year-over-year price comparisons will likely appear increasingly more favourable. It is important to remember that the baseline for the latter half of 2008 was unusually low, particularly in the fourth quarter when the full impact of the global financial crisis was felt. Our expectation is that most Canadian regions will experience stable housing prices through into the spring of 2010,” concluded Soper.

Regional Market Summaries


In Halifax, a stable economy has contributed to a healthy real estate market where average house prices increased modestly despite a slight dip in sales activity. The market is beginning to pick up following a slow first quarter. Pent up demand will see a return to a more active market in the last half of the 2009 with the anticipation of a slight boost in sales activity and average house prices growing at a leisurely pace.


The housing market in Montreal experienced a solid second quarter, with average house prices for most property types expected to increase for the remainder of 2009. Higher inventory levels resulted in balanced market conditions seeing the number of new listings equal to the number of sales. Low interest and unemployment rates will help maintain the strength of the real estate market through to the end of the year.


Ottawa continues to remain a steady market for residential real estate, with sales activity in the second quarter coming out strong from a slow first quarter. Ranked number two among Canada’s large cities for affordable real estate and coupled with low interest rates, all types of buyers were drawn to the market. House prices are expected to remain stable throughout the remainder of year with numbers slightly higher than anticipated.


In Toronto, the real estate market witnessed significant second quarter gains. The return of consumer confidence and an upswing in spring market activity brought house prices and unit sales down as buyers emerged to take advantage of affordable properties and low lending rates.
As the market begins its transition from a buyer’s market to a balanced market, with indications of a seller’s market arising, it’s anticipated that the market will stabilize by the end of year.


Winnipeg’s real estate market has remained relatively resilient in the second quarter with average house prices in key housing segments increasing from the first quarter of 2009. Real estate in Winnipeg is modestly priced when compared to other cities in Canada, creating ideal conditions for buyers in the province. Looking ahead, average house prices are anticipated to stabilize for the remainder of the year.


Regina’s real estate market started on the road to recovery in the second quarter of 2009 and is expected to further improve through the remainder of the year. An increase in unit sales helped diminish the city’s high inventory levels as buyers are beginning to initiate deals. Recovering manufacturing and resource sectors, new construction activity in Regina, and low interest rates have also helped to improve buyer confidence.


With the economic downturn and the oil and gas industry struggling, the housing market in Calgary has been on the decline since 2008, after many years of price inflation at the beginning of the decade. Quarter one of 2009 revealed some signs of price increases and stabilization in certain areas in Calgary, but the second quarter reveals fluctuations in the market. These price fluctuations are occurring across Calgary in all housing types with the market forecast predicting price reductions for the remainder of 2009.


Housing market conditions in Edmonton were characterized by lower inventory levels and moderate house price increases. Buyer demand was strong during the second quarter as most buyers felt a sense of urgency to capitalize on the recent market conditions. This has led to a slight tightening in Edmonton’s housing market with appreciation in average house prices expected for the last half of 2009.


Vancouver’s real estate market stabilized in the second quarter of 2009 following a price correction that started last fall moving towards a balance between supply and demand. Properties priced at, or below, market value are generating multiple offers from buyers. Average house prices throughout the last half of the year are expected to inch upwards, but increases will likely be in the low single digits.

Canadian Annual House Price Changes

Royal LePage’s Q2 2009 House Price Survey shows the following annual change of prices for key housing segments in select national markets:

Detached Bungalows Standard 2 Storey Standard Condominium
Market Q2 2009 Average Last Quarter Average Q2 2008 Average Bungalow % Change Q2 2009 Average Last Quarter Average Q2 2008 Average 2 Storey % Change Q2 2009 Average Last Quarter Average Q2 2008 Average Condo % Change
Halifax 235,333 215,667 233,000 1.00% 277,333 262,333 275,000 0.80% 164,000 162,000 154,500 6.10%
Charlottetown 160,000 157,000 156,000 2.60% 190,000 188,000 185,000 2.70% 120,000 120,000 120,000 0.00%
Moncton 158,000 156,000 164,000 -3.70% 134,200 134,500 132,000 1.70% n/a n/a n/a n/a
Fredericton 172,000 167,000 162,000 6.20% 210,000 210,000 197,000 6.60% 140,000 137,000 126,000 11.10%
Saint John 187,681 201,476 202,364 -7.30% 240,889 268,000 285,179 -15.50% 126,000 181,387 119,191 5.70%
St. John’s 200,000 193,000 181,000 10.50% 276,000 267,000 249,333 10.70% 215,333 205,667 193,333 11.40%
Atlantic 198,368 190,748 192,636 3.00% 198,368 190,748 192,636 3.00% 174,623 172,423 156,774 11.40%
Montreal 236,148 232,375 234,352 0.80% 337,872 330,056 336,443 0.40% 209,311 206,528 204,942 2.10%
Ottawa 325,417 317,500 316,167 2.90% 325,417 318,500 315,750 3.10% 212,750 207,833 203,667 4.50%
Toronto 416,179 405,286 434,282 -4.20% 544,785 516,052 562,478 -3.10% 296,039 289,397 311,026 -4.80%
Winnipeg 237,750 231,663 233,800 1.70% 262,914 251,721 257,800 2.00% 143,700 145,943 144,614 -0.60%
Regina 272,900 266,625 278,850 -2.10% 245,000 245,000 254,000 -3.50% 180,375 168,806 190,000 -5.10%
Saskatoon 312,250 312,500 340,375 -8.30% 337,250 348,500 388,000 -13.10% 202,500 187,000 236,000 -14.20%
Calgary 401,600 391,833 438,122 -8.30% 400,167 390,689 437,744 -8.60% 252,344 245,756 285,033 -11.50%
Edmonton 302,143 297,857 320,000 -5.60% 328,571 322,979 348,571 -5.70% 203,833 199,167 226,000 -9.80%
Vancouver 760,000 743,750 839,500 -9.50% 846,000 828,750 943,000 -10.30% 424,000 406,500 450,750 -5.90%
Victoria 466,000 453,000 450,000 3.60% 446,000 435,000 470,000 -5.10% 275,000 260,000 295,000 -6.80%
National 327,964 319,865 339,879 -3.50% 392,378 379,708 407,374 -3.70% 236,612 231,526 246,490 -4.00%

Canadian Housing Trends

2009 Royal LePage Market Survey Forecast

City Prov 2008/2009 Change 2009 Mid-Year Forecast 2009
2008 2007
Halifax NS 4.20% 241,800 240,451 234,300 232,106 216,339
Montreal QC 2.10% 263,500 260,312 254,400 258,041 248,949
Ottawa ON 2.60% 298,000 297,330 291,000 290,483 273,058
Toronto ON -1.50% 374,400 377,091 364,800 379,943 377,029
Winnipeg MB 3.50% 203,900 205,380 204,900 196,940 174,202
Regina SA 10.60% 254,000 245,228 243,300 229,716 165,613
Calgary AB -4.80% 386,000 373,835 402,000 405,267 414,066
Edmonton AB -4.60% 317,500 315,831 333,000 332,852 338,636
Vancouver BC -5.70% 560,000 558,893 540,100 593,767 570,795
CANADA* -2.00% 297,500 300,777 295,000 303,594 305,822

* Represents all homes in Canada
Source: Royal LePage Real Estate Services.The Canadian Real Estate Association and local real estate boards

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