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Ontario Real Estate Outlook 2011
Ontario real estate values expected to climb further in 2011 as housing sales stabilize in most major centres.
Although improved economic fundamentals will have a positive impact on Ontario housing markets moving forward, the forecast for residential real estate sales remains static in most major centres in 2011.
Ontario real estate sales expected to remain static
The RE/MAX Housing Market Outlook 2011, examining trends and developments in 26 major centres across the country, found that home-buying activity in 2010 fell short of 2009 levels. Housing values, however, continued to climb, with virtually all areas reporting an upswing in average price, ranging from just under one per cent to 15 per cent this year. Lower inventory levels in many markets offset the effects of diminished demand, propping-up price in almost every instance. Kitchener-Waterloo Ontario, Quebec City, and St. John’s saw the greatest increases in average real estate price this year, while Eastern Canadian markets including Hamilton-Burlington Ontario, Sudbury Ontario, Windsor Ontario, Moncton and Prince Edward Island were the only markets that bucked the downward trending in home sales in 2010.
By year-end, approximately 441,000 homes are expected to change hands nationally, a five per cent decline from the 465,251 real estate sales reported in 2009. Ontario housing values are forecast to continue to climb, up an estimated seven per cent to $340,000, compared with $320,333 one year earlier.
In terms of resale housing activity in Ontario, what many are talking about as the new normal is actually a return to the traditional real estate cycle. The past decade was truly unbelievable - never before in Ontario have we experienced a run up in real estate that was as strong or lasted as long.
As we have digressed from the typical real estate pattern, people have forgotten what the usual healthy cycle looks like, but all the hallmarks are there. Ample inventory levels, steady demand, and moderate growth, both in terms of sales and prices, will characterize the Ontario real estate market in 2011.
While the pace may appear lackluster in comparison to what we’ve grown accustomed to, it underscores the principles of real estate 101: The market is cyclical. All boats rise and fall with the tide.
Greater stability is expected to characterize the Ontario real estate markets in 2011, with Canadian housing sales predicted to mirror 2010 levels at 441,000 next year, while average price is forecast to escalate three per cent to $350,000 by year-end 2011.
Looking forward, we see steady improvement in provincial and local economies—which will bode well for real estate markets across Ontario. The relentless drive in the market reminiscent of years past will be gone and instead, we can expect to see more normal, balanced market conditions, with buyers maintaining a slight edge.
Almost all markets are reporting an anticipated increase in housing values next year, with St. John’s in Newfoundland-Labrador in front with an estimated eight per cent hike in average price in 2011. The value of homes in Greater Vancouver, Kelowna, Regina, Saskatoon, London-St. Thomas Ontario, Ottawa Ontario, Sudbury Ontairo and Greater Montreal is also predicted to climb five per cent.
Low interest rates and improving consumer confidence levels should stimulate the Ontario home-buying activity at all price points next year. Overall real estate gains will be more muted—a welcome reprieve for purchasers. 2011 will be a year that will see more widespread recovery across a broader array of economic sectors, setting the stage for a better 2012.”
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