In its recently released Housing Evolution Report, RE/MAX reports that since 2000, the average value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010. The billions of dollars spent in new construction, renovation and renewal has been instrumental in driving up price appreciation in Canada's major centres.
The report says the value of residential building permits issued nationally between 2000 and 2010 was $340 billion and an estimated $450 billion was spent on renovations. The impact of these two forces alone has fuelled the Canadian residential real estate market and construction industry for more than a decade.
As a result, investment in Canada's housing stock is at an all-time high in 16 Canadian residential real estate markets examined in the report. Higher quality housing has translated into extraordinary price appreciation across the country with 10 markets experiencing increases in excess of 100 per cent since 2000.
Investment in residential real estate through renovation, infill, and redevelopment across the country is expected to continue for years according to RE/MAX's executive vice-president Ontario- Atlantic Canada, Michael Polzler. The report says that the unprecedented sum funnelled into housing has effectively changed the landscape of Canada's major centres. New home construction has advanced suburban sprawl, giving rise to new sought-after pockets in virtually every centre across the board.
Infill continues to redefine neighbourhoods, particularly in areas where the value of existing structures have not kept pace with escalating land values. Infill is also maximizing land potential, often replacing one, two or several tired structures with a block of town homes or mixed-use residential, even high-rise apartments.
According to the report, residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually. And the trend has not been limited to single-family homes. Canada's cities have also mounted ambitious renewal of their own, particularly in the heart of most major centres - the urban cores. Non-residential construction, including infrastructure spending has had a positive secondary impact, in turn boosting spending on the residential side. Redevelopment holds the greatest potential for cities on the cusp of exciting rejuvenation. Many stagnant industrial land is expected to be changed into bustling residential, commercial and retail hubs.
The past decade has also marked the rise of the condominium. Toronto, for example, has become the largest condominium market in North America. But it is also gaining traction in smaller cities such as Kelowna, London and Halifax - to name a few. In B.C. and Alberta, they now account for 25 to 50 per cent of residential sales. Condominiums have gained widespread appeal with aging boomers, looking for lifestyle and low maintenance; young professionals, attracted to trendy locales; and first-time buyers, looking to get their foot in the door to homeownership.
Condominiums have changed the urban landscape, driving residential neighbourhoods up, instead of out, and bringing to market a bevy of new options from mixed-use residential, live-work studios, lofts, townhomes, and condo bungalows. Townhomes, in particular, have experienced a serious rise in popularity, bridging the gap for empty-nesters and retirees not yet ready for apartment-style living.
Lastly, Canada's population growth has also been a key factor in the growth of the housing market with the country experiencing double digit growth of 11 per cent since 2000. By 2031, Canada's population is expected to be over 42 million.
"There's no question that population growth will continue to support investment, propping revitalization and new construction in the years ahead, and by extension raising the bar and prices in real estate markets even further," Polzler said.