Major residential real estate markets poised
for further growth in 2014
Mississauga, ON (December 11, 2013) -- Canadian consumers remained remarkably steadfast in their determination to achieve homeownership in 2013, fuelling residential real estate sales and average price nationally to a five-year high, despite a spotty regional performance. Improved economic performance on both a national and global stage, combined with historically low interest rates and rising consumer confidence, should spark greater strength in 2014, with housing sales and values expected to further appreciate, according to a report released today by RE/MAX.
The RE/MAX Canadian Housing Market Outlook 2014 examined trends and developments in 25 major markets across the country. The report found that the number of homes sold is expected to match or exceed 2012 levels in almost two-thirds of markets (15/25) in 2013, led by strong activity in British Columbia, including Vancouver (10 per cent) and Kelowna (10 per cent). Ninety-two per cent (23/25) of markets are set to experience average price increases by year-end 2013, with Hamilton-Burlington the country’s frontrunner at 7.5 per cent, followed by Barrie and District at seven per cent, Calgary and St. John’s at six per cent, and Greater Vancouver, Winnipeg and the Greater Toronto Area at five per cent. The forecast for 2014 shows the upward trend gaining momentum, with values expected to climb yet again in 92 per cent (23/25) of centres, led by Greater Toronto at six per cent. Strength and stability are forecast to characterize Canadian real estate in 2014, with sales estimates on par or above year-ago levels in all markets examined, led by Kelowna (10 per cent) and Calgary (nine per cent).
Nationally, an estimated 466,000 homes will change hands in 2013, an increase of three per cent over the 453,372 sales recorded in 2012. Canadian home sales are expected to climb two per cent to 475,000 units by year-end 2014. The average price of a Canadian home is forecast to appreciate four per cent to $380,000 in 2013, up from $363,740 in 2012. Values are expected to continue to escalate in 2014, rising three per cent to $390,000 by year end.
“Canadian housing markets are on solid ground after a somewhat harrowing first and second quarter of 2013,” says Gurinder Sandhu, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Better-than-expected economic performance, relatively stable inventory levels, and the threat of higher interest rates down the road proved mid-year game changers, providing the stimulus necessary to jumpstart homebuying activity. The serious momentum that emerged in the latter half of the year is expected to spill over into 2014, setting the stage for continued growth and expansion in most residential markets.”
Regional disparities surfaced early in 2013,
according to the RE/MAX Report, and were evident throughout the year. Alberta started the year with a bang, with
both major markets bucking the national downward trending in sales. Homebuying activity in British Columbia,
Saskatchewan, Manitoba, and Ontario kicked into high gear in July, with most
centres expected to move ahead of 2012 levels by year end, led by Greater
Vancouver, Kelowna, Victoria (six per cent), Windsor-Essex (six per cent),
Edmonton (five per cent) and Hamilton-Burlington (five per cent). Yet, performance in Quebec and Atlantic
Canada is forecast to fall short of 2012 levels. More consistent performance is expected in
2014, especially given economic projections for the East Coast and Quebec. Both regions should rebound in the new year,
led by Halifax-Dartmouth (five per cent), Moncton (three per cent), Greater
Montreal (two per cent) and Quebec City (two per cent).
“Inventory played a key role in keeping housing markets at an equilibrium in 2013—with supply largely meeting demand throughout the year,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The anticipated run-up in inventory failed to materialize in most major centres. Prices remained healthy as a result, with steady upward momentum noted, particularly in the latter half of the year. The trend is forecast to continue, with average price appreciation expected to break existing records in 2014.”
Although there are several factors that are expected to contribute to rising housing values on a national basis, one of the most pressing is build out. Nowhere is that more obvious than in Vancouver, where the mountains and the ocean have prevented further growth, and the Greater Toronto Area, where the greenbelt has stymied future development. As such, the availability of low-rise homes relative to the population is expected to contract, placing further pressure on prices. Vertical growth and its affordable price point is representative of the future.
“We’re definitely seeing a greater commitment to higher density at a municipal level,” says Ash. “In fact, the trend already underway in Vancouver and Toronto, has gained serious momentum in smaller markets where cities are moving to infuse vibrancy into the urban core through mixed-use residential/commercial/retail development. The level of investment is substantial—dovetailing with revitalization efforts currently underway.”
Solid underpinnings continue to support healthy levels of real estate activity from coast to coast. Buyers appear to be realistic in their pursuits, and after several rounds of mortgage tightening, many are coming to the table better qualified, with larger downpayments and readjusted expectations. Imposed restrictions have had the desired effect. A sound framework is now in place to support steady and sustainable growth over the next several years. Existing inventory levels remain crucial to Canadian housing markets moving forward. The tightening currently demonstrated at entry-level price points—as more first-time buyers make their way back into the market—could translate into further price hikes down the road.
“Canadian homebuyers remain savvy, with a long-term mindset that bodes well for stability,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “Yet, they also value progress, and we expect that to translate again in 2014. Equity gains should continue to result in tangible leaps to larger homes or better neighbourhoods, as well as a growing wave of renovation and revitalization. Stock market performance is also expected to bolster activity, as paper wealth is converted to material wealth.”
About the RE/MAX Network
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. Over 90,000 agents provide RE/MAX a global reach of more than 90 countries. RE/MAX is Canada’s leading real estate organization with approximately 19,000 sales associates and 750 independently-owned and operated offices nationwide. RE/MAX, LLC, one of the world’s leading franchisors of real estate brokerage services, is a subsidiary of RE/MAX Holdings, Inc. (NYSE:RMAX). For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.ca.
About Integra Enterprises and RE/MAX Ontario-Atlantic Canada
RE/MAX INTEGRA is privately owned by Canadian entrepreneurs and represents nearly a third of all RE/MAX agents worldwide. Our Ontario-Atlantic region is driving towards 10,000 quality agents. Our US regions—New England, Minnesota and Wisconsin and Indiana—account for over 6,000 agents, and Europe and the Middle East account for more than 12,000 agents.
Forward Looking Statements
This press release includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “intend”, “expect”, “estimate”, “plan”, “outlook”, “poised,” “should” and “project” and other similar words and expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements. Such risks include, without limitation, those described in the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation in RE/MAX Holdings Inc.’s registration statement on Form S-1 filed with the United States Securities and Exchange Commission (“SEC”) and (1) changes in business and economic activity in general, (2) changes in the real estate market, including changes due to interest rates and availability of financing, and (3) changes in laws and regulations that may affect our business or the real estate market. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, RE/MAX Holdings Inc. does not intend, and undertakes no duty, to update this information to reflect future events or circumstances. Investors are referred to in RE/MAX Holding Inc.’s registration statement on Form S-1 and subsequent reports filed with the SEC.
For more information:
Shelby Schneider Eva Blay/Charlene McAdam
RE/MAX Ontario-Atlantic Canada Point Blank Communications
905.542.2400 416.781.3911
Data Source: Historical data is sourced from CREA or Local Real Estate Boards. Estimates and forecasts are based on the opinion of independent RE/MAX broker/owners and affiliates.
| RESIDENTIAL AVERAGE PRICE BY MARKET | |||||||||
| 2008 - 2014 | |||||||||
| Market | 2008 | 2009 | 2010 | 2011 | 2012 | 2013E* | % +/- | 2014F** | % +/- |
| BRITISH COLUMBIA | |||||||||
| Greater Vancouver | $593.767 | $592.441 | $675.853 | $779.730 | $730.063 | $765.000 | 5 | $800.000 | 5 |
| Victoria | $484.898 | $476.137 | $504.561 | $498.300 | $484.164 | $484.000 | PAR | $490.000 | 1 |
| Kelowna | $430.755 | $400.450 | $419.884 | $404.756 | $404.712 | $397.000 | -1 | $405.000 | 2 |
| ALBERTA | |||||||||
| Edmonton | $332.852 | $320.378 | $328.803 | $325.395 | $334.318 | $345.000 | 3 | $358.800 | 4 |
| Calgary | $407.149 | $387.413 | $398.764 | $402.851 | $412.315 | $437.000 | 6 | $448.000 | 2,5 |
| SASKATCHEWAN | |||||||||
| Regina | $229.716 | $244.088 | $258.023 | $276.469 | $301.332 | $312.000 | 3,5 | $320.000 | 3 |
| Saskatoon | $287.777 | $279.779 | $296.378 | $309.823 | $331.867 | $345.500 | 4 | $356.000 | 3 |
| MANITOBA | |||||||||
| Winnipeg | $196.940 | $207.342 | $228.706 | $241.409 | $255.058 | $267.000 | 5 | $275.000 | 3 |
| ONTARIO | |||||||||
| Hamilton-Burlington | $280.790 | $290.946 | $311.683 | $333.498 | $360.059 | $387.000 | 7,5 | $402.500 | 4 |
| Kitchener-Waterloo | $267.255 | $266.385 | $289.294 | $301.010 | $311.006 | $320.000 | 3 | $330.000 | 3 |
| London-St. Thomas | $210.888 | $213.127 | $228.114 | $232.387 | $238.822 | $247.000 | 3 | $250.000 | 1 |
| Ottawa | $290.483 | $304.801 | $328.439 | $344.791 | $352.610 | $360.000 | 2 | $367.000 | 2 |
| Greater Sudbury | $216.769 | $203.941 | $225.023 | $234.544 | $247.462 | $254.000 | 2 | $259.000 | 2 |
| Greater Toronto | $379.943 | $395.460 | $431.463 | $465.412 | $497.150 | $520.000 | 5 | $550.000 | 6 |
| Barrie and District | $264.034 | $263.959 | $281.961 | $287.588 | $299.685 | $320.000 | 7 | $330.000 | 3 |
| St. Catharines | $222.104 | $225.421 | $237.376 | $244.630 | $253.469 | $258.000 | 2 | $265.500 | 3 |
| Kingston and Area | n/a | n/a | n/a | n/a | $280.095 | $286.000 | 2 | $297.000 | 4 |
| Windsor-Essex | $162.599 | $156.615 | $163.054 | $170.034 | $175.581 | $183.000 | 4 | $190.000 | 4 |
| QUEBEC | |||||||||
| Greater Montreal | $262.611 | $274.787 | $297.588 | $313.997 | $319.026 | $324.000 | 2 | $324.000 | 0 |
| Quebec City | $197.450 | $212.203 | $237.309 | $247.088 | $257.713 | $267.000 | 4 | $264.500 | -1 |
| NEW BRUNSWICK | |||||||||
| Saint John | $168.965 | $179.762 | $178.867 | $177.328 | $174.026 | $181.000 | 4 | $184.000 | 2 |
| Moncton | $143.173 | $150.135 | $152.257 | $158.361 | $158.107 | $160.000 | 1 | $165.000 | 3 |
| NOVA SCOTIA | |||||||||
| Halifax-Dartmouth | $232.106 | $239.158 | $253.610 | $260.950 | $270.742 | $276.000 | 2 | $278.000 | 1 |
| PRINCE EDWARD ISLAND | |||||||||
| $139.944 | $146.044 | $147.196 | $149.617 | $152.250 | $157.000 | 3 | $161.700 | 3 | |
| NEWFOUNDLAND & LABRADOR | |||||||||
| St. John's | $187.571 | $218.862 | $251.191 | $268.608 | $285.529 | $302.500 | 6 | $317.600 | 5 |
| CANADA | $303.594 | $320.367 | $339.049 | $363.346 | $363.740 | $380.000 | 4 | $390.000 | 3 |
| * Estimate **Forecast | |||||||||
| Source: Historical values are sourced from CREA or Local Real Estate Boards. Estimates and forecasts are based on the opinions of independent RE/MAX broker/owners | |||||||||
| and affiliates. |
| RESIDENTIAL UNIT SALES BY MARKET | |||||||||
| 2008 - 2014 | |||||||||
| Market | 2008 | 2009 | 2010 | 2011 | 2012 | 2013E* | % +/- | 2014F** | % +/- |
| BRITISH COLUMBIA | |||||||||
| Greater Vancouver | 25.149 | 36.257 | 31.144 | 32.936 | 25.445 | 28.000 | 10 | 29.000 | 2 |
| Victoria | 6.171 | 7.660 | 6.169 | 5.773 | 5.460 | 5.800 | 6 | 6.000 | 4 |
| Kelowna | 3.773 | 3.924 | 3.289 | 3.330 | 3.902 | 4.300 | 10 | 4.730 | 10 |
| ALBERTA | |||||||||
| Edmonton | 17.369 | 19.139 | 16.403 | 16.963 | 17.641 | 18.500 | 5 | 19.400 | 5 |
| Calgary | 22.931 | 24.711 | 20.801 | 22.466 | 26.634 | 27.500 | 3 | 30.000 | 9 |
| SASKATCHEWAN | |||||||||
| Regina | 3.338 | 3.704 | 3.581 | 3.909 | 3.922 | 3.700 | -5 | 3.775 | 2 |
| Saskatoon | 3.522 | 3.822 | 3.558 | 4.027 | 4.171 | 4.200 | 1 | 4.200 | 0 |
| MANITOBA | |||||||||
| Winnipeg | 11.854 | 11.509 | 11.572 | 12.297 | 12.094 | 12.300 | 2 | 12.300 | 0 |
| ONTARIO | |||||||||
| Hamilton-Burlington | 12.110 | 12.680 | 12.934 | 13.932 | 13.035 | 13.700 | 5 | 14.300 | 4,5 |
| Kitchener-Waterloo | 6.047 | 6.347 | 6.389 | 6.252 | 6.212 | 6.300 | 1 | 6.300 | 0 |
| London-St. Thomas | 8.395 | 8.113 | 8.128 | 8.048 | 8.020 | 8.075 | 1 | 8.150 | 1 |
| Ottawa | 13.908 | 14.923 | 14.586 | 14.551 | 14.497 | 13.800 | -5 | 13.900 | 1 |
| Greater Sudbury | 2.913 | 2.371 | 2.669 | 2.829 | 2.764 | 2.800 | 1 | 2.800 | 0 |
| Greater Toronto | 74.552 | 87.308 | 85.545 | 89.099 | 85.498 | 87.500 | 2 | 89.000 | 2 |
| Barrie and District | 4.058 | 4.326 | 4.105 | 4.228 | 4.576 | 4.650 | 2 | 4.850 | 4 |
| St. Catharines | 2.894 | 2.808 | 2.940 | 2.836 | 2.621 | 2.700 | 3 | 2.780 | 3 |
| Kingston and Area | n/a | n/a | n/a | n/a | 3.791 | 3.750 | -1 | 3.900 | 4 |
| Windsor-Essex | 4.376 | 4.586 | 4.791 | 4.773 | 4.907 | 5.200 | 6 | 5.400 | 4 |
| QUEBEC | |||||||||
| Greater Montreal | 40.440 | 41.753 | 42.299 | 40.357 | 40.089 | 36.500 | -9 | 37.200 | 2 |
| Quebec City | 7.838 | 7.962 | 7.073 | 7.200 | 7.219 | 6.300 | -12 | 6.425 | 2 |
| NEW BRUNSWICK | |||||||||
| Saint John | 2.559 | 2.283 | 2.017 | 1.835 | 1.886 | 1.850 | -2 | 1.870 | 1 |
| Moncton | 2.663 | 2.386 | 2.402 | 2.467 | 2.259 | 2.200 | -3 | 2.275 | 3 |
| NOVA SCOTIA | |||||||||
| Halifax-Dartmouth | 6.472 | 6.062 | 5.944 | 6.119 | 6.239 | 5.700 | -9 | 6.000 | 5 |
| PRINCE EDWARD ISLAND | |||||||||
| 1.413 | 1.404 | 1.487 | 1.521 | 1.614 | 1.600 | -1 | 1.600 | 0 | |
| NEWFOUNDLAND & LABRADOR | |||||||||
| St. John's | 3.835 | 3.642 | 3.470 | 3.647 | 3.871 | 3.650 | -6 | 3.650 | 0 |
| CANADA | 434.477 | 465.068 | 446.913 | 456.749 | 453.372 | 466.000 | 3 | 475.000 | 2 |
| *Estimate **Forecast | |||||||||
| Source: Historical values are sourced from CREA or Local Real Estate Boards. Estimates and forecasts are based on the opinions of independent RE/MAX broker/owners | |||||||||
| and affiliates. |