ScotiaBank Releases Real Estate Trends Report
ScotiaBank released their Real Estate Trends report today.
Check it the full report here.
Excerpt from the report:
” Canadian real estate markets remain remarkably buoyant, especially in light of the deepening housing downturn in the United States and the generally softening conditions in most other advanced economies globally. Housing starts totaled 228,343 units in 2007 ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â essentially matching the high level of activity of the prior two years and only 2% below the 233,431 unit cyclical peak of 2004. Strength was evident across the country, but led by more than a 60% surge in new homebuilding in Saskatchewan, where activity was underpinned by strong job growth, good affordability and a positive shift in net interprovincial migration. This momentum has carried through to 2008, with builders breaking ground on 222,700 new units (annualized) in January amid a flurry of condo starts.
Resale activity is equally brisk, with MLS sales volumes reaching a new record in 2007 and average home prices climbing a further 11%. While Western Canada continues to lead in price appreciation, average home prices rose by at least 5% in all provinces last year. New mortgage products with extended amortization periods, which effectively lower monthly payments, appear to be an important factor maintaining demand. Early reports for January point to a modest easing in sales and price appreciation.
We expect construction, sales and price gains to moderate in 2008 due to decreasing affordability, especially for first-time buyers, and some softening in domestic economic conditions associated with the intensifying U.S. slowdown and the persistently strong Canadian dollar. Housing starts will likely ease to around 204,000 units ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â still firmly above underlying household formation ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â with the more affordable multiple-family segment holding up better than single-detached construction. Meanwhile, more balanced resale market conditions ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â as sales volumes edge down and more listings come on stream ÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬Â should bring average price increases back into the mid-single digit range. Renovation activity, which lags the trend in home resales by 1-3 years, will outperform new construction. “