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Edmonton residential housing prices to increase 3% in 2011 to match increase in 2010 according to RE/Max report

Although improved economic fundamentals will have a positive impact on Canadian housing markets moving forward, the forecast for residential real estate sales remains static in most major centres in 2011, according to a report released today by RE/MAX.

“In terms of resale housing activity, what many are talking about as the new normal is actually a return to the traditional real estate cycle,” says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada.  “The past decade was truly unprecedented—never before have we experienced a run up that was as strong or lasted as long.   As we have digressed from the typical 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 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.”

“Low interest rates and improving consumer confidence levels should stimulate home-buying activity at all price points next year,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “Overall 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.”

In the meantime, a number of factors will continue to support sustained sales and price growth in the months and years ahead:

  • Land scarcity, intensification, urban renewal, infill and renovation will continue to drive up values—regardless of supply and demand—in major metropolitan areas.  The Canadian housing stock is ever-evolving, particularly in the central core of each city.  With average price pushing closer to or well past the $300,000 mark in the vast majority of major centres, and affordability of single-family homes diminishing, the demand for attainable product will rise in tandem, bolstering the growing condominium segment in the years ahead.
  • The upper-end of the market continues to be a strong indication of the overall health of Canada’s housing sector.  Typically the first segment to soften in a downturn, luxury homes posted record sales activity in 2010, and demand is expected to remain solid in 2011.  Strong sales in the high-end will continue to prop up average prices.
  • Immigration will remain a serious force stimulating demand, particularly given the penchant for homeownership among today’s new Canadians.  While the formation of new households used to take an average of five years, a growing number of newcomers arrive skilled, financially secure, and ready to make their home-buying moves.  It is estimated that Canada will average 250,000 new immigrants annually.
  • In the year ahead, federal, provincial and local stimulus in the form of continued infrastructure spending and capital projects will be a considerable boon to economic stability and employment, providing consumers the confidence to move forward with real estate purchases.
  • Volatility in the money markets will continue to drive buyers to the tangibility of homeownership, both as a reliable long-term investment and a form of shelter, particularly given low vacancy rates and a lack of new rental construction in a number of major centres.

To view the full RE/MAX Housing Market Outlook 2011 Report, click here:http://files.newswire.ca/577/Outlook2011ReportFNL.pdf

The report anticipates that residential prices in Edmonton will increase by 3% in 2011 to match the 3% increase estimated for 2010.

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