We often like to talk about the investment value of real estate; the return, the appreciation, the ability to leverage your investment and so on. You know what else I like about it? You can also live in it. Try living in a mutual fund or in gold. O.K., well maybe gold!
According to a new report released last week by RE/MAX, “pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada.” The release entitled RE/MAX Decade in Review 1997 – 2007, went on to say that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. Some highlights include:
– Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.
– Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year.
– Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values – or an 11.7 per cent increase annually with average price rising from $111,587 a decade ago to $338,636 in 2007.
– Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period.
Closer to home, Barrie came in at Number 10 in the top 10 markets with 84.3% appreciation over the decade and, it came at number 5 in unit sales appreciation. This is not surprising given that our neighbour is one of the fastest growing cities in the country.
One interesting tidbit I found in the section covering the GTA was that in 1997, there were just 175 sales of properties over the $1 million dollar mark. That number soared to 2309 units in 2007; an increase of 1219%.
There was something else that is worth thinking about. As the report says, the decade was not without its obstacles: the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border. Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.
If you’re interested, you can view the full report.
Marg Scheben-Edey is a Broker with RE/MAX four seasons realty limited, Brokerage in beautiful Collingwood, ON. With three decades of experience, Marg is a leader in the local real estate marketplace and is ready to help guide both Buyers and Sellers in achieving their real estate goals. Email Marg