One of the country's leading real estate companies expects a calmer market this year after a decade of highs and lows that ended with a seller's market in 1999.
A report just released by Royal LePage Real Estate Services Ltd., looking back over the past decade, is a powerful reminder of the breathtaking activity and excitement in the housing market.
The report offers a snapshot of the best -- and worst -- of times in housing markets across the country in the past 10 years.
It has also helped the firm predict that balance will be the key word to describe real estate markets across the country this year.
"We expect to see a return to more balanced market conditions as inventory is replenished," says Simon Dean, president of Royal LePage. "Many markets displayed a very healthy level of activity through most of 1999 and the country over all could be characterized as a sellers' market. Shortages of inventory were routinely experienced in many areas of the country, notably Montreal, Calgary, Toronto and Ottawa, ensuring higher prices for homes."
On a national basis, the average house price has risen 5.7 per cent over the past decade, hitting a 1999 average of $157,400 over the average of $148,812 10 years earlier. The high water mark for the 1990s was 1994, when the average house price across the country hit $158,299.
The city that consistently came out on top in terms of price tags was Vancouver, which hit a peak of $307,747 in 1995. The lowest price nationally was Regina, which saw an average price of $68,476 in 1991.
The hottest market in the country last year was Toronto, where there were 59,200 transactions, a 6.9-per-cent increase in number of sales, setting a record. The average sale price was $226,000 in 1999, reflecting a rise of 4.2 per cent over the previous year. But a look at the report is a reminder that house prices in that city hit a high of $273,698 in 1989.
"We don't see [an overheated market]happening again for a long time," says Sherry Chris, Royal LePage vice-president.
A decade ago, many sales agents couldn't imagine a day when the upward spiral in Toronto would end. When the first predictions of a dramatic fall in the real estate market surfaced in 1989, many agents laughed, Ms. Chris says. Yet, one year later, sale prices in Toronto were down to $254,890, and by 1996 the average price tag had dropped to $198,150, a fall of 27.6 per cent. The average cost of $226,000 in 1999 represents a rebound of 14 per cent from that low.
A decade ago, the Toronto market was fuelled in part by "tremendous money from Asia," with some purchasers paying cash for properties and "driving prices up month by month," she says.
A slight decrease in unit sales because of a drop in first-time buyers, coupled with a slight increase in prices, should keep the Toronto market "good and stable," Ms. Chris says.
Expected to stay hot are condominiums in the downtown core, she says, noting there was also surprising action last year in the "larger, million-dollar-plus" end of the market.
Looking across the country, house prices in Halifax have increased in value every year since 1989 except for 1995, while Moncton's sale prices have increased slowly but steadily for a decade. In St. John's, the average house price has grown 14 per cent in 10 years, hitting $95,000 in 1999 from $82,273 a decade earlier.
At $119,156, Montreal's average sale price last year was the highest figure in a decade. Similarly, Ottawa saw its highest prices in 10 years, with an average price tag of $149,814.
While the years 1990, 1995 and 1997 saw a softening of prices in Winnipeg, 1999 represented the second consecutive year of increases, with an average sale figure of $86,142, up 4 per cent from a year earlier.
In Calgary, many first-time buyers felt squeezed out, according to Royal LePage, with average prices up 5 per cent, hitting $165,221 in 1999.
And in Victoria, a detached home averaged $226,000 last year, with prices up 1.4 per cent over a year earlier.
An increasingly important factor shaping market activity is new technology, with buyers using the Internet to check out listings and take virtual tours of properties, notes Ms. Chris, adding Internet shopping is not surprising given the fact that the average age of home buyers today is 34 years, while the average age of sellers is 36.