Century 21 Canada Limited Partnership

Century 21 Canada Limited Partnership

November 22, 2006 08:00 ET

CENTURY 21 Canada Fall 2006 House Price Survey

Strong price increases in the West, stability in the East Canadian market will escape the price declines seen in U.S.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 22, 2006) - Canada's housing prices will remain strong in the West and stable in Central and Atlantic Canada through the rest of 2006 and into 2007, according to an analysis by CENTURY 21 Canada released today.

Don Lawby, President of CENTURY 21 Canada, says all Canadian markets will avoid the price declines experienced in many markets in the United States - and Canada's strongest markets in Alberta and British Columbia will not suffer the price crashes seen in some hot spots in southern California, Nevada, Arizona and Florida.

"Housing markets in both Canada and the U.S. have had robust price increases for several years, with some regions growing at spectacular rates," says Lawby.

"In Canada over the past six months, price increases have slowed except for a few hot markets, but all markets are supported by strong economic fundamentals such as job growth and stable mortgage rates," Lawby says. "In the U.S., the economies of certain regions and cities have weakened throughout 2006 and can't continue to support house price increases."

The situation in the U.S. is exacerbated by other factors. "There is more speculation in the U.S. than we have seen in Canada. Lenders in Canada don't have the same lending policy as the U.S. For the first time in history we have interest-only mortgages. In the U.S., they've had them for years," Lawby says.

"In the U.S., because they can deduct mortgage interest from income tax, people use their homes like an ATM. Once you start doing that, you treat your home as a different vehicle rather than as a place to live. It becomes your cash machine. So people try to make money off the value of their homes, and that pushes up the value of homes faster. This has occurred only in certain areas, parts of California, Nevada, Arizona, Florida and parts of the North East, and these are the areas where the markets are taking a real tumble."

CENTURY 21 typical house prices

The CENTURY 21 Canada Fall 2006 National House Price Survey reflects the price of a typical home in communities across Canada. A "typical home" is the type of home that occurs most frequently in any given neighbourhood or community. These homes are not identical, but meet a fairly narrow range of criteria including size and design.

The CENTURY 21 survey includes housing sales in 39 markets across the country over two time periods - over the past six months and the past five years.

Over the past six months, the largest price increase occurred in Edmonton northeast, where the price of a typical bungalow increased 36 per cent to $300,000 from $233,000 (Over the past five years, the price of a similar home in Edmonton northeast increased to $300,000 from $123,000, up 144 per cent).

Other strong markets over the past six months were Red Deer, up 19 per cent (up 68 per cent over 5 years); North Vancouver, up 12 per cent (108 per cent over five years); Vancouver west side, up 10 per cent (up 100 per cent over five years); Summerside, up nine per cent (up 54 per cent over five years); Halifax west, up eight per cent (up 48 per cent over five years); and Regina, up seven per cent (up 37 per cent over five years).

Several other Canadian markets have moderated over the past six months compared with their performance over five years. Examples are Calgary Lakeview, up one per cent over the past six months (up 128 per cent over five years); Fort McMurray, up one per cent (up 114 per cent over five years); Kelowna, up seven per cent (up 103 per cent over five years); Toronto Beaches, up six per cent (up 106 per cent over five years) and Vernon, zero growth (up 129 per cent over five years).

U.S. prices

In the U.S. over the past six months, the median price of all existing homes across the country fell to U.S.$200,000 from U.S.$223,000, a decline of 11.5 per cent, according to an analysis of data from the U.S. National Association of Realtors.

Over the same six months, the median price increased 2.2 per cent to U.S.$184,000 in the South, increased 1.8 per cent to U.S.$169,000 in the Midwest, fell 10.6 per cent to U.S.$259,000 in the Northeast, and fell 4.6 per cent to U.S.$332,000 in the West.

CENTURY 21 Canada

Century 21 Canada Limited Partnership is a real estate franchisor with exclusive rights to the CENTURY 21 brand in Canada and is part of the world's largest residential real estate sales organization. CENTURY 21 provides comprehensive training, management, administrative and marketing support for the CENTURY 21 System, which is comprised of more than 8,100 independently owned and operated franchised broker offices in 44 countries and territories, with more than 143,000 sales associates worldwide. CENTURY 21 Canada is the only organization to offer customers AIR MILES® reward miles on real estate transactions. For more information visit the award-winning CENTURY 21 Canada website at www.century21.ca.

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