Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.
The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010. The report found strong seller’s/balanced conditions prevailed for much of the timeframe, prompting significant gains in housing values. The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009. But fewer listings served to offset diminished demand and provided greater stability.
Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82% in London-St Thomas to a high of 9.56% in Regina. The national average was 6.82%. By far the tightest market in the nation was Winnipeg, where sellers ruled the roost for 85% of the decade, followed by Hamilton-Burlington (67%), Regina (63.6%), Kitchener-Waterloo (59.8%) and Edmonton (57.5%).
Housing markets have been remarkably hearty over the past decade and the stage is set for a better than expected 2011. Inventory has proven to be an effective form of market self-regulation, providing both an ideal climate for price escalation and a shelter in periods of softer home-buying activity. As a number of city centres are already reporting stronger than usual activity out of the gate, it’s clear supply will continue to be the wild card in 2011.