Homeowners poised to cash in on decade-long housing boom

More homeowners are poised to cash out and move up this year backed by gains averaging some 93 per cent during a 10-year housing boom that, in losing some of its steam, has opened new doors for would-be buyers, according to a new report from realty company ReMax.

Move-up buyers took advantage of the softening market last year as a chance to buy a bigger home in 14 of 16 major markets surveyed by ReMax, the exceptions being Victoria and Vancouver, where sales slumped significantly.

Move-up houses in the $500,000 to $700,000 range accounted for about 20 per cent of sales across the GTA last year, up 8 per cent from the previous year, says the ReMax Move-Up Buyers Report 2013 released Thursday.

That buy-up spree is likely to continue this year as interest rates remain low and many first-time buyers take a breather in the face of tougher mortgage lending rules, the report notes.

While departing Bank of Canada governor Mark Carney, and others, have warned of the hazards of treating houses like ATM machines — for living the good life or funding retirement — the report paints a fascinating picture of who won the biggest jackpot in the Canadian housing market lottery between 2002 and 2012.

How did your city fare during the housing boom? Click here to find out.How did your city fare during the housing boom? Click here to find out.



Surprising as this may seem, you would have seen an almost tripling of the value of your house (from $100,751 to $301,145) — more than 11 per cent per year from 2002 to last year — if it was in Regina rather than Riverdale.

Second- and third-place in the housing gains department were Saskatoon and Winnipeg, with annual increases averaging 10.25 and 10.03 respectively over the decade, ReMax says.

Across the GTA the average house appreciated from $275,231 in 2002 to $497,298 last year, an almost 80 per cent increase over the decade, amounting to average annual gains of about 6 per cent.

Those price escalations eased somewhat from 2007 to 2012 (from an average $376,236 to $497,298, amounting to a still-hefty 32 per cent gain) and show “no signs of being in bubble territory — and most definitely not in the often cited markets of Vancouver and Toronto,” said Gurinder Sandhu, executive vice president and regional director of ReMax Ontario-Atlantic Canada in a statement on the report.

“While gains in Regina, Saskatoon and St. John’s have been exceptional, house prices are playing catch up, given a stronger economic status and following decades of steady, but modest, growth.”

Saint John recorded the lowest price gains during the decade-long boom, the report shows, with the average house price increasing by about 62 per cent, or less than 5 per cent a year, from an average of $103,544 in 2002 to $168,048 last year.

The report found those first-time buyers now in the market are moving up faster than in the past, an average four to seven years from their initial purchase.

“Inventory levels remain a challenge within Toronto proper — with fewer than 300 single-detached homes currently listed for sale in the $500,000 to $700,000 price range from Victoria Park to Islington, north to Steeles Ave.,” the report notes.

Listings are expected to climb as the March to May spring buying season nears.

At the same time, the number homes for sale in the 905 regions has increased, “allowing purchasers the luxury of time and choice.”
The Toronto Star Susan Piggs