Canadian real estate market still a top global performer ( 6/15/2011 )
Canada’s inflation-adjusted home prices were up 5% in the first quarter of this year compared to the same time last year, ranking as one of the biggest gains internationally, according to a global real estate report.
Canada’s gains were behind only France in the first quarter of 2011 among 12 countries studied by Scotiabank Group’s Global Real Estate Trends report. (China was not included in the survey.) Ireland is coming off year-over-year gains of 11.2% and 12% in its house prices in the third and fourth quarters of 2010, but 2011 figures were not yet available.
At the other end of the spectrum, Spain’s house prices were down 8.5%, followed by the U.S., which was down 4.8%. The U.K., Sweden and Australia also showed drops in the first quarter of 2011 compared to the same time last year.
Canada’s inflation-adjusted prices have gained year-over-year in 10 of the last 13 quarters. But even with its strong showing, Scotiabank warned that a flurry of Chinese luxury homebuyers in Vancouver could be impacting the latest increases in average prices.
“Excluding Vancouver, average real estate prices were up less than 1% year-over-year in the first quarter, consistent with a more balanced national market,” said the report.
The positives in Canada remain strong, however. Sales are supported by steady job creation and affordable borrowing costs for buyers, said Scotiabank.
Once on the same level as the U.S. in 1996, inflation-adjusted home prices in Australia and Canada have been pulling away, especially since the recession in the U.S., the report shows. Canada overtook the U.S. in inflation-adjusted home prices in final quarter of 2006 and the gap has only widened since then.