Low inventory levels set stage for heated Spring market
in most major Canadian centers

Active listings down in 81 per cent of markets in January
Lack of inventory will be the greatest challenge facing housing markets across the country this Spring,
according to a report released by RE/MAX.
The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16
markets across the country, found that unusually strong activity during one of the traditionally quietest
months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The
threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the
introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity
from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of
markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets
surveyed.
Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While
home ownership is still within reach in many major centrers, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.
Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo
(-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax- Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.
The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent),
London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list
of centers with the highest increases in price appreciation. These included Victoria at 25.5 per cent,
Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the front runners for price growth.
There have never been so many motivating factors in play at once. We’re in for a heated Spring market
that will, in all probability, spill over into the summer months as the window of opportunity draws to a
close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.
While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards.
Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the
entry-level price point—experiencing multiple offers. Properties priced at fair-market value will likely
sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and
it’s not likely to subside unless more inventory comes on-stream.
The level of frustration is growing, as pent-up demand builds. For every successful offer, there are those that will walk away empty-handed. They’re thrust back into the buyer pool and the process starts all over again. Some buyers are upping the ante, while others are considering alternate housing options.
Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.
Recent revisions to lending criteria will add fuel to the fire in the short term. Buyers considering a
variable rate mortgage will step up their plans for home ownership in the next month or so just to get in
under the wire. In the longer term, buyers will adjust, but move forward. Compromise has long been a
reality—particularly in the larger centers. This simply means they may go smaller or further in their
pursuits.
It’s been a 180 degree turnaround from this time last year. It’s clear that real estate from coast to coast
has roared back to life and markets are once again firing on all cylinders. The vast majority of markets
are now recovered and fully-evolved, with all segments working in tandem. At the luxury price point,
activity was brisk in seventy-three per cent of centers surveyed, with momentum ramping up in the
remainder. Opportunity exists in some areas, but the question is for how much longer?

Market                                                     2009                      2010                   % +/-
St. John's                                                  951                        999                      5%
Saint John                                              2005                       2180                      9%
Halifax-Dartmouth                                   3311                      2695                    -19%
Hamilton-Burlington**                             1028                       1261                     17%
Ottawa                                                    3988                       2840                    -30%
Kitchener-Waterloo                                 1323                         884                    -33%
London-St. Thomas                                2538                       2071                    -18%*
Greater Toronto                                     20450                     12052                    -41%
Winnipeg                                                 2222                       1938                    -13%
Regina                                                      456                         381                     -16%
Saskatoon                                               1156                         729                     -37%
Calgary                                                  9225                        6838                    -26%***
Edmonton                                               6573                        4864                    -26%
Kelowna                                                  4648                       4120                     -11%
Victoria                                                    2930                       2061                     -30%
Greater Vancouver                                13996                     10218                     -27%
ACTIVE LISTINGS BY MARKET - JANUARY
*Detached Homes **Freehold Homes ***Total MLS
Source: Local Real Estate Boards