VANCOUVER, BRITISH COLUMBIA--(Marketwired - Mar 18, 2014) - In a report released today by Sotheby's International Realty Canada, key economic, demographic and market indicators predict promising momentum in the residential real estate markets of the country's largest metropolitan centres this spring and into 2014. The Housing and Economic Outlook analyzes macro-level factors that anchor the health of the national real estate market, including the U.S. economic recovery, strength of the Canadian dollar, Canadian transfer of wealth, unemployment rates, immigration numbers and interest rate trends. The report also examines year-over-year market data that anticipates the trajectory of local market performance.
According to Ross McCredie, President and CEO of Sotheby's International Realty Canada, "The current economic climate in Canada sees metropolitan real estate benefiting from a weak dollar and recovering U.S. economy. Combined with demographic trends that predict demand for housing and a lack of inventory in most urban centres, the Canadian real estate market will see accelerated growth in the months ahead."
- The U.S. economic recovery is strengthening Canada's export and manufacturing sectors, Canadian consumer confidence and the health of the housing market in turn.
- In 2014, Canada's largest metropolitan markets will continue to benefit from increased foreign real estate investment resulting from a weak Canadian dollar that is currently at $0.90 U.S.
- The transfer of approximately $1 trillion in inheritance to Canadian baby boomers over the next 20 years is fuelling the housing market as millennial-first time buyers are assisted in home purchases and baby boomers utilize new capital to change homes, downsize and purchase recreational property.
- Healthy immigration levels continue to contribute to strong urban housing markets, with the strongest impact felt in Toronto and Montréal, followed by Vancouver and Calgary.
- Historically low interest rates continue to encourage buyer and investor confidence, as economists anticipate no key interest rate changes until 2015.
Vancouver Market Highlights:
- Driven primarily by lack of inventory, home sales and prices in Vancouver are expected to rise slightly above the 10-year average with modest gains anticipated in the second quarter of the year.
- Spring sales activity will also be driven by rebounding consumer confidence and mortgage rates sustained at historical lows.
- Unemployment rates are expected to remain well below the national average due to billion dollar investments in the liquefied natural gas, transportation, commercial and residential real estate sectors, further sustaining confidence in the real estate market.
Calgary Market Highlights:
- Following record-setting growth in 2013, Calgary housing sales and prices are expected to trend upward through the spring.
- Low levels of resale and rental inventory combined with strong consumer demand predict a continued trend of multiple offers, bidding wars and above-asking prices, particularly in the single family home segment.
- Economic strength from oil, gas and potential pipeline projects will support gains in immigration and net migration, bolstering demand for housing.
Toronto Market Highlights:
- Toronto real estate sales will remain strong in 2014, driven by lack of attached and detached home inventory in the Downtown Central Core with a ripple-out effect to the city's perimeter.
- The outlook for the city's luxury housing market is expected to remain healthy into 2014, as sales volume of homes over $2 million were up close to 20% year-over-year in the first two months of 2014.
- Leading the country in international immigration, newcomers to Toronto will continue to fuel a real estate market already in short supply of rental and resale housing.
Montréal Market Highlights:
- The overall performance of Montréal's spring housing market will be closely tied to the outcome of the provincial election on April 7, with sales momentum slowing until an electoral decision is reached.
- Economic hurdles that will continue to temper the city's real estate market include rising taxes, an unemployment rate that exceeds the national average and diminishing government revenues.
- Favourable influences include strong immigration numbers (the second highest in the country) and a Canadian exchange rate that supports Montréal's manufacturing and exports sectors, as well as its climate for foreign real estate investment.
About Sotheby's International Realty Canada
Combining the world's most prestigious real estate brand with local market knowledge and specialized marketing expertise, Sotheby's International Realty Canada is the leading real estate sales and marketing company for the country's most exceptional properties. With offices in over 25 residential and resort markets nationwide, our professional associates provide the highest caliber of real estate service, unrivaled local and international marketing solutions and a global affiliate sales network of approximately 600 offices in more than 45 countries to manage the real estate portfolios of discerning clients from around the world.
*The information contained in this report references data from Statistics Canada, the Bank of Canada, the Canadian Real Estate Association, Canada Mortgage and Housing Corporation, MLS boards across Canada and other secondary sources. Sotheby's International Realty Canada cautions that data of this nature can be useful in establishing trends over time, but do not indicate actual prices in widely divergent neighbourhoods or account for price differentials within local markets.
This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby's International Realty Canada or Sotheby's International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.