Housing Market Outlook 2010

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R

HOUSING MARKET

OUTLOOK 2010

CanadianOverview

0

100,000

200,000

300,000

400,000

500,000

600,000

20082007 2009* 2010**

CANADAResidential Unit Sales 2007 2010

*Estimate **Forecast

Source: CREA, Local Real Estate Boards, RE/MAX

2%

7%

Te worst recession since the Great Depression had

a serious impact on housing perormance duringthe frst quarter, with home sales down 27 per centnationally, compared to 2008 igures. Consumersadjusted to new market realitiesincluding buyersmarket conditionsas the supply o homes availableor sale rose and values dipped. Hardest hit weremarkets in Greater Vancouver and Sudbury, wherethe number o homes sold declined 40 per cent; Calgaryslipped 35 per cent; and Victoria, Greater oronto,St. Catharines, Regina, Montral, London, Kitchener-

Waterloo, Haliax-Dartmouth, and Hamilton-Burlingtonwere o 2008 fgures by more than twenty per cent.

Yet, ater one o the most di cult frst quarters inCanadian housing history, the market miraculouslychanged course. Rising like the phoenix rom the ashes,real estate activity across the country gained momentum.

First-time buyers, eeding on low interest rates, ventured

into the market, taking advantage o greater aord-ability levels. Move-up purchasers ollowed in tandem,trading up to larger homes and/or better neigbhourhoods.

By year-end, housing sales had recovered in virtuallyall residential housing markets across the country,led by a 45 per cent increase in Greater Vancouver.

wo markets, including Ottawa and Qubec City, hithistoric highs in residential sales, reporting more than15,500 and 14,000 units sold respectively. Last but notleast, housing values posted new records in 15 o the 23markets surveyed, including St. Johns with an upswing

o 15 per cent. Other noteworthy developments includeshattered price benchmarks in Greater Vancouver at$600,000; oronto at $400,000; Ottawa at $300,000;and Qubec City and St. Johns at $200,000. Nationally,residential housing sales are expected to top 465,000units by year-end 2009, a seven per cent increase overone year ago; while housing values climb fve per centto $318,000, up rom $303,594 in 2008.

Te bounce back o 2009 will long be remembered orits dramatic swing in residential housing sales acrossthe country. While the aects o the recession willcontinue to linger in some areas, the worst is clearlybehind us. Te stock market has rallied, while notenough to return it to its post-recession high o15,000. Ater severa l consecutive quarter s o neg-ative GDP growth, a small gain was reported inthe third quarter o 2009.


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Housing Market Outlook 2010R

2

British Columbia

Greater Vancouver Area

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

20082007 2009* 2010**

GREATER VANCOUVER AREAResidential Unit Sales 2007 2010

*Estimate **ForecastSource: CREA, Local Real Estate Boards, RE/MAX

1%

45%

2008 2009** 2010***

CANADAResidential Average Price 2007 2010



300000

350000$350,000

$340,000

$330,000

$320,000

$310,000

$300,00020082007 2009** 201020082007 2009* 2010**

Heading into 2010, provincial economies are expectedto recover, with Western Canada playing a signifcantrole in the upswing. U.S. economic recovery shouldhelp bolster the Canadian economy as demand orCanadas exports rise. GDP growth nationally shouldhover at 2.6 per cent next year.

Overall housing starts are expected to return to morenormal levels o activityhovering at 176,000 aterdropping 33 per cent rom 211,000 in 2008 to 142,000in 2009. Consumer spending is expected to lead therecovery, with retail spending up an estimated 4.8

per cent by year-end 2010. While unemploymentfgures uctuate rom coast-to-coast, all out is expectedto continue in 2010, with rates orecast to climb tonine per cent nationally.

As economic perormance improves across the country,so too should residential real estate. Western Canadianmarkets are expected to see the greatest percentageincreases in unit sales in 2010, with Kelowna takingthe lead with an anticipated 10 per cent rise in thenumber o homes sold. Average price projections callor continued growth in 2010, with a moderate increasein housing values orecast across the board. Inventory

will once again assume the wildcard role, with anydecline placing upward pressure on prices. By year-end2010, the number o homes sold in Canada is predictedto climb another two per cent to 475,000. Te averageprice o a home in Canada is also expected to experi-ence an uptick, rising two per cent to $325,000thehighest level in Canadian history.

It was the best of times; it was the worst of times.

Charles Dickens amous opening line could haveeasily applied to the roller coaster housing marketthat was Greater Vancouver in 2009. First quarterstatistics were dismalresidential sales had declined58 per cent in January, 45 per cent in February, and 24 percent in March. Average price ollowed suit, bottomingout at $530,763 in March 2009. May marked theturning point, with a 16 per cent upswing in sales,ollowed by a 74 per cent increase in June, and an 89.5

per cent jump in Julymaking Greater Vancouverone o the frst markets to surpass year-to-date salesin 2009. Momentum continued to build, as doubleand triple-digit increases were reported each andevery month that ollowed. Housing values alsobounced back, with the monthly average climbingclose to $640,000 by year-end.

Greater Vancouver is expected to lead the countrywith a phenomenal 45 per cent increase in unit sales,bringing the total number o residential homes soldto 36,500, up rom 25,149 one year earlier. Price has

also battled back, with housing values in the city setto climb one per cent to $600,000setting a newannual average or Vancouver.


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First-time buyers were frst out o the gate in 2009,taking advantage o the combination o slidingresidential housing values, record low interest rates,and incredible selection. Entry-level, single-amilyhomes priced in and around $500,000 moved quickly

as purchasers exed their newound muscle. Condo-minium sales ollowed, with aordably-priced unitssnapped up beore prices started to climb. As con-sumer confdence levels soared, in response to im-proved economic orecasts and the advent o the 2010Olympics, the balanced market conditions that existedearlier in the year had shited in avour o the seller.Strong demand, lack o inventory, and multiple oers,particularly on well-priced properties in desirableVancouver neighbourhoods, were characteristic othe latter hal o the year. Luxury home sales, the frstto buckle under the pressure o an ailing economy,

roared back, posting signifcant year-over-year gains.

While Greater Vancouvers economy has stabilized,the real recovery has yet to begin. Consumer conf-dence continues to climb as the eects o the worstrecession since 1982 slowly recede into the historybooks. Te outlook or next year will be a stark contrastto the widespread economic maladies that plaguedBritish Columbia in 2009, when virtually ever sectoro industry was aectedrom manuacturing, naturalresources, construction, and services to capital spending,government revenues, and the labour market.

Prospects or the province are orecast to improve sig-nifcantly. Exports, in particular, will beneft rom globalrecovery, more so in tandem with an upturn in the U.S.Consumer expenditures and new home construction

will urther bolster the market, as will an anticipated

uptick in capital investment projectsincluding gov-ernment initiatives. Te 2010 Olympics will also serveto ramp up tourism and provide a much-needed boostto the economy. Real GDP is expected to hover at3.2 in 2010up rom negative growth o 2.6 in 2009.Unemployment levels are expected to experience amodest declinealling to 7.6 per centdown roma fve-year high o 7.7 per cent. Retail sales are expectedto reverse last years downward trend, settling in at6.0 per cent. Housing starts are orecast to post thegreatest gain, up over 60 per cent to 24,000 by year-end 2010. Te sectorone o the worst impacted by

the global downturnwill continue to gain momen-tum into 2010.

Supported by stronger economic undamentals in2010, Greater Vancouvers residential housing marketis expected to continue to climb. Tirty-seven thousandhomes are orecast to change hands by year-end,up one per cent over 2009 levels. Average price isprojected to escalate urther, rising three per cent to$618,000 next year. While frst-time buyers will playan integral role in 2010, move-up buyers are expectedto ramp up activity. Investors are also expected to

have an impact on the market in 2010.

Victoria

While the impact o the global economic recessionwas evident in Victorias housing market through theFall o 2008 and into the frst quarter, the marketbounced back with a vengeance, improving steadilythroughout 2009. Demand or resale homes is now verystrong. Conditions quickly transitioned rom balancedback into sellers territory, ollowing a tightening ininventory levels in late Spring. Listingsat over 5,000units earlier in 2009are down 31 per cent rom year-ago levels at just 3,200 units, resurrecting the multiple-oer phenomenon throughout the city s hot pockets.

Te solid activity has been largely supported by re-bounding consumer conidence levels, record lowinterest rates, the stability o Victorias government

$650,000

$625,000

$600,000

$575,000

$550,00020082007 2009* 2010**

GREATER VANCOUVER AREAResidential Average Price 2007 2010




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(as the provincial capital), and its expanded high-technology sector, which has now eclipsed tourism asthe citys primary industry. Te unemployment rate,although nearly double the rate o one year ago, stillremains well below the national rate, hovering at 6.1

per cent in September. Economic diversifcation hasenabled Victoria to are relatively well, comparedto other major Canadian centres, in the ace o therecent recession.

Given a solid economic oundation, Victorias resalehousing sector is on track to fnish the year at anestimated 7,500 units. Te citys average price willexperience a slight decrease o two per cent, closingout 2009 at approximately $475,000. With limitedinventory and pent-up demand, strong activity isexpected to carry orward into 2010. Multiple oers

should remain airly commonplace or sought-aterproduct in good locations. Te market will continue tolean towards sellers conditions, unless supply improves.Days on market will remain relatively stable. Resaleactiviy will see a notable transition in 2010 rom amarket dominated by frst-time buyers to one whereall segments are working in tandem. Evidence othat is already starting to emerge, with the upperend surging ahead in October, with 20 sales in excess o$1 million. Move-up activityrepresenting sales upto the $700,000 price pointhas been ramping upin Victoria or several months. In the entry-level, the

condominium segment will hold steady, with a goodselection o product helping to keep prices in check.Next year, supply should return to more balanced

conditions or condominiums, with sales and pricesexpected to edge up by fve per cent. Investors willcontinue to look to real estate in 2010, given its provenrecord as a sae, tangible asset class providing consistent,long-term, year-over-year gains. Rising consumerconfdence and improving economic conditions willsupport growth in the resale market in 2010, with7,900 to 8,000 units orecast to change handsafve per cent increase over estimated 2009 year-endlevels. Average price is orecast to rise fve per centas well, reaching $495,000.

Kelowna

0

2,000

4,000

6,000

8,000

10,000

20082007 2009* 2010**

VICTORIAResidential Unit Sales 2007 2010


7%

21%

2008 2009** 2010***

VICTORIAResidential Average Price 2007 2010



400000

500000

20082007 2009* 2010**

$500,000

$490,000

$480,000

$470,000

$460,000

$450,000

While the pause that took place in Kelownas realestate market in late 2008 and early 2009 was quitedramatic, the rebound that ollowed was equallyremarkable. Pent-up demand has kept the marketbuzzing with activity, as purchasers were enticed bylower prices and rock-bottom interest rates. Inventorylevels have begun to all in the city, and the markethas returned to more balanced conditions. Averageprice has staged a strong comeback, continuing onthe upswing, and is expected to fnish out the yeardown just three per cent at $417,800. Sales willreach an estimated 3,900 unitsa three per centincrease over 2008 levels.

Solid momentum is expected to carry orward into2010, as the cityand the provinceare poised orpositive growth. Encouraging signs o recovery have

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Alberta

already emerged in Kelowna. Te citys unemploy-ment rate ell or the ourth consecutive month inOctober, and now sits at 6.3 per centa modest riseabove pre-recession levels that hovered near 5.5 per cent.Its progress has been quite substantial, consideringthe June unemployment igure, tied to a bruisedtourism sector, sat at 12.3 per cent.

Diversifcation has played a role in recovery and willcontinue to contribute to its advancement. Te high-tech sector remains a vibrant and growing segmento the workorce in Kelowna. While it did experience

a slowdown in the ace o the recession, it continuesto generate new, well-paying jobs or the region.

Te orestry sector will rebound in 2010, as demandor lumber products improves in tandem with theU.S. housing recovery. Te areas healthcare sector isattracting new businesses, while expansion at UBCOkanagan and the Kelowna Airport has also createdemployment opportunities. With consumer spendingand confdence on the rebound, the citys tourismsector is also better-positioned.

Improving undamentals will help support demandor resale housing next year, with frst-time buyersleading the charge, ollowed closely by the move-upbuyer. A tighter supply o well-located homes in theentry-level will continue to spark some multiple oersin 2010. Te luxury market will trend upward onceagain. Demand or waterront properties has alreadyincreased considerably in recent months. Condo-minium prices have stabilized and will post modest

improvement next year. Te oversupply is now beingabsorbed, with more balanced conditions expected toemerge. Fewer single-amily homes have been comingon stream and that is predicted to increase competitionin the New Year. Increased consumer confdence will

push sales ahead 10 per cent by year-end 2010 to 4,300units, while average price rises fve per cent to $438,700.

Edmonton

0

1,000

2,000

3,000

4,000

5,000

2008 2009* 2010**

KELOWNAResidential Unit Sales 2008 2010



10%3%

2008 2009** 2010***

KELOWNAResidential Average Price 2007 2010


Source: CREA, OMREB, RE/MAX

400000

500000$450,000

$440,000

$430,000

$420,000

$410,000

$400,00020082007 2009* 2010**

Edmontons healthy residential housing market wasthe frst to emerge rom the depths o the recession,

with sales surpassing year-to-date fgures or 2008 inJune 2009. Low interest rates, greater aordability,and pent-up demand were behind the push or realestate early in the year, as consumer confdence levelsslowly escalated. First-time buyers snapped up entry-level product at signifcant cost savings. By October,momentum had reached the top-end o the market,

with sales over $750,000 moving ahead o 2008 levels.Given the solid percentage increases reported since

June, the number o homes sold by year-end is expectedto climb to 20,500 units, up 18 per cent over 2008,and on par with 2007 fgures. Average price, aterpeaking in 2007 at $338,636, has since stabilized at$321,000down just our per cent rom 2008 levels.

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upswing, should reach an estimated $330,000 by year-end 2010a three per cent increase over one yearearlier. Inventory levelsat about 5,500are ore-cast to remain stable, representing a three to ourmonth supply. Market conditions should be balancedthroughout much o the year, leaning slightly in avouro the seller. First-time buyers are expected to once againplay a signifcant role, stimulating activity in virtuallyevery segment o the market. Its anticipated thatdemand or condominiums will be constant, given theiraordable entry-point. An inux o new conversionunits in months ahead should be absorbed relatively

quickly but ewer multi-unit housing starts in 2010overall may apply some pressure to the resale market.

Calgary

he balanced residential marketplace took bothrealtors and consumers by surprise in 2009, manyo whom hoped or the best but prepared or the

worst. However, economic perormance, with a 2.8per cent decline in GDP growth orecast or 2009,

has been less than stellar. Te energy sector contin-ues to battle back in Albertaoil prices are on theupswing and orecast to rise urther next year. Whilechallenges still lie ahead, some positive industrydevelopments, namely the Kearl oil sands project,are hoped to return to the oil sector to a growthcycle or at least oset recent contraction.

he good news is that real GDP is expected toclimb three per cent in Alberta in 2010, bolstered byhousing, new construction, a recovering oil and gassector, and consumer spending. Oil prices are expected

to hover around the $80 markwhich should serve tokickstart activity in the mega sand projects. Improvingglobal demand or commodities is orecast to placeupward pressure on prices, while rising confdence andmore normal crop conditions should also have a positiveimpact on economic perormance in 2010. Retail salesat 5.6 per cent will be one o the top perormers in thecountry, alling just behind British Columbia andSaskatchewan. Unemployment levels hover atapproximately 7.1 per cent.

Building on the real estate recovery already underway,

the number o homes sold in Edmonton is expected toedge slightly higher in 2010, rising to 21,000, up twoper cent over 2009. Housing values, inally on the

While economic concerns dominated headlines through-out much o the year, Calgarys residential real es-tate market quietly staged a comeback. As a result,overall housing sales are expected to top 26,000 unitsby year-end, an increase o 12 per cent rom 2008levels. Recovery has largely been driven by frst-timebuyers, many o whom had been priced out o themarket in recent years. Pent-up demand, rock-bottominterest rates, greater aordability, and improved selec-tion all served to entice purchasers early in the year

who seized upon entry-level product priced under$400,000 in established communities in the south-

west, northwest, south central, and north central.Te subsequent surge in activity placed upward pres-

0

5,000

10,000

15,000

20,000

25,000

20082007 2009* 2010**

EDMONTONResidential Unit Sales 2007 2010



2%

18%

2008 2009** 2010***

EDMONTONResidential Average Price 2007 2010



300000

350000$350,000

$340,000

$330,000

$320,000

$310,000

$300,00020082007 2009* 2010**

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sure on aordable housing stock, causing values toclimb eight to ten per cent rom record low levelsreported earlier in the year. Average price, however,remains o last years pace, hovering at $385,000down fve per cent rom 2008.

As o October 2009, the number o homes sold inCalgary had surpassed levels reported during the sameperiod in 2008. More balanced market conditionsexisted, with tight inventory levels reported in certainhot pocket areas. While some move-up activity wasunderway, the top-end o the market remained rela-tively sotdespite the sale o two $10 millionproperties last Summer.

Volatility in the energy market and the uncertaintysouth o the border served to drag down economic

perormance in Calgary this year. Expenditures andassociated costs have been reduced, with only twoprojects moving orwardKearl and the expansiono the Athabasca Oil Sands. But real GDP, orecastto slip about 2.8 per cent by year-end, should head intopositive territory in 2010. A number o actors supportan upswing in GDP growth next year. Calgarys popu-lation is expected to climb by about 1.7 per cent in2010, representing an inux o close to 18,000 people.Government stimulus in the orm o inrastructurespending should also help. Its anticipated that 2010

will be a year to re-establish economic traction, with

both Calgary and the province better positioned orstronger growth in 2011.

Balanced market conditions are expected to prevailin Calgarys residential real estate market in 2010.Prices are projected to frm up, with values edgingupward or the frst time in almost two years. An amplesupply o homes should be listed or sale, with inventorylevels limited in high demand areas. First-time buyers

will lead the charge or housing, ollowed by move-upbuyers taking advantage o avourable market conditions.Aordable alternatives such as condominiums pricedunder $300,000 will continue to be popular with entry-level buyers. Upscale properties, priced rom $800,000,are expected to gain momentum next year, as purchasers

in this segment o the market regain confdence. Byyear end, sales are orecast to climb eight per centto 28,000 units, while average price is expected torecord a fve per cent increase at $403,000.

2008 2009** 2010***

CALGARYResidential Average Price 2007 2010



300000

400000

500000$450,000

$425,000

$400,000

$375,000

$350,00020082007 2009* 2010**

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

20082007 2009* 2010**

CALGARYResidential Unit Sales 2007 2010


8%

12%

7

Saskatchewan

ReginaReginas residential real estate market came ull circlein 2009, with buyers dominating the irst hal othe year and sellers staking claim to the second.Apprehensive purchasers waited on the sidelinesor much o the frst quarter in anticipation o reces-sionary allout. When it ailed to materialize, theycautiously ventured into the market, taking ull ad-


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Saskatoon

vantage o low interest rates, greater selection, andsoter housing values. Record activity was reportedin June, July, August and September as frst-timeactivity stimulated the move-up market. By the Fall,inventory levels had dropped, housing prices had

frmed, and sellers had the upper hand at the ne-gotiating table. By year-end, approximately 3,800homes are expected to change hands in Regina, a14 per cent increase over 2008 and just 200 salesshort o peak 2007 levels. Average price is orecastto climb, bringing housing values in the city to$245,000 in 2009, a moderate increase o seven percent over the $229,716 reported in 2008.

Saskatchewans economy showed remarkable resil-ience in 2009, despite an anticipated 1.3 per centdecline in GDP growth. Unemployment levels re-

main the lowest in the country at approximately 4.9per centsignifcantly less than the national average.

Going orward, Saskatchewan is expected to leadthe country in terms o GDP growth (at about 3.6per cent) in 2010, outperorming the national averageby almost a ull percentage point. Healthy residentialreal estate activity, improved weather conditions, andincreased global demand or agricultural products(boosting such products as potash) should strengtheneconomic perormance. Te mining sector is expectedto see a boost in uraniumwith production set to double

0

1000

2000

3000

4000

5000

20082007 2009* 2010**

REGINAResidential Unit Sales 2007 2010



5%

14%

2008 2009** 2010***

REGINAResidential Average Price 2007 2010



150000

200000

250000

300000$300,000

$275,000

$250,000

$225,000

$200,000

$175,000

$150,00020082007 2009* 2010**

8

Concerns over the global economic crisis continuedto drag down sales in Saskatoon during the frst halo the year, but as sentiment improved, sales beganto climb. High consumer confdence, a better-than-average economy, low unemployment, aordable inter-

over the next decade. Its prospects or oil will shore upthe provinces economic oundation considerably, withSaskatchewan poised to eclipse Alberta as Canadaslead supplier o conventional light crude by 2012.

Unemployment is still expected to edge higher in 2010at 5.3 per centas recovery is underway. Retail sales areexpected to rebound, to 5.8 per cent helped out byrecent provincial income tax cutssurpassing every pro-

vince in Canada with the exception o British Columbia.

Net positive interprovincial migration and immi-

gration are expected to urther bolster the residentialreal estate market in Regina in the year ahead. Asconsumer confdence returns to post-recession levels,home sales are orecast to edge higher, climbing fveper cent to 4,000 units by year-end 2010. Inventoryis expected to improve, with more balanced marketconditions emerging. First-time buyers are expectedto once again lead the charge, with the move-upsegment ollowing in lock-step. Ater several years odouble-digit increases in average price, appreciation will bemore tempered, rising a healthy six per cent to $260,000.


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0

1,000

2,000

3,000

4,000

5,000

20082007 2009* 2010**

SASKATOONResidential Unit Sales 2007 2010



5%4.5%

2008 2009** 2010***

SASKATOONResidential Average Price 2007 2010



200000

250000

300000$300,000

$275,000

$250,000

$225,000

$200,00020082007 2009* 2010**

9

well as higher commodity prices or key productssuch as oil and uranium as the global economy recovers,and the city is well positioned. Strong GDP growth,exceeding 3.5 per cent, is orecast or the province oSaskatchewan in 2010.

Saskatoons expanding population will also boostexisting home sales next year. From 2006 to 2008 (themost recent period available rom Statistics Canada),the number o Saskatoon residents swelled by 10,000or our per centthe ourth highest growth ratein the countryand continues to c limb. he citys

low vacancy ratehovering near two per centandrising rents will serve as a catalyst driving renters intohomeownership next year. Low vacancies are alsoexpected to prompt increasing activity among inves-tors, as they move to take advantage beore pricesincrease. Currently, investors are seeking out single-amily homes priced rom $200,000 with good in-come potential. Others are looking to housing as amore tangible assetone that is hoped can providebetter returns than stocks and bonds.

Balanced market conditions are expected to prevailthroughout 2010. Entry-level purchasers will remainthe driving orce, seeking out homes priced under$300,000. Demand or condominiums is expectedto hold up well, although an oversupply currentlyexists, which will help keep prices in check in theshort-term, beore edging up again next year. Teupper end o the market, priced over $500,000, willbe slower to recover, but sales in 2010 should remain

est rates, and prices below year-ago levels proved theperect storm. Te combination o these actors reinvig-orated the frst-time buyers market, enticing many tomake their moves amid avourable conditions. As a result,sales are expected to close out 2009 4.5 per cent ahead

o 2008 levels at 3,700 units, while average price comesin three per cent below last years fgure at $279,000.

Although average price registered a slight decline in2009in large part due to a greater number o entry-level salesindividual housing values have held up

well.Buyers continue to beneft rom a good selectiono homes listed or sale. Supply, still above average,continues to all in line with more balanced condi-tions, which will aid in price recovery next year.

Te outlook or Saskatoon heading into 2010 is vibrant.

Te citys economy was scraped by the recession, butavoided the serious impact sustained by other majormarkets. In act, Saskatoon boasts the lowest unem-ployment rate in Canada at present at 4.3 per cent.

Te employment outlook going orward remains positive,with Saskatoon set to embark on 58 capital projects,valued at $167 million. Tis includes $51 million orthe River Landing Destination Centre, $21 millionor the expansion o reservoirs, $10 million or landfllgas collection, $9.1 million in water main renewal,$6.3 million or expansion o win WanuskewinRoad, and $850,000 or the Credit Union Centre

LED screen upgrades, to name a ew. Combinestimulus construction with improved demand oragricultural products, including potash, in 2010, as


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Program has been quite successul and continuesto help attract skilled immigrants to Manitoba and

Winnipeg. In act, the city is set to welcome 6,000 to7,000 new residents next year and each subsequent

year through to 2013. Tis, combined with an alreadyhealthy economy set to ramp up in 2010consumerspending, retail sales, exports, the agriculture sector,base metal prices and capital expenditures are all poisedor improvementwill bode well or Winnipegsreal estate market going orward.

By year-end 2009, Winnipeg will record an estimated

11,750 unit sales, just one per cent shy o 2008 levels,while average price climbs to $207,000up fve percent rom year-ago fgures. Sellers market conditions

will continue to prevail into the new year, with inventoryexpected to drop slightly once again. Competition

will continue or homes priced under $250,000, withmultiple oers commonplace or quality starter product.First-time buyers may have to ante up next year toreach their goals or adjust expectations. Move-upbuyers should play a more signifcant role, althoughentry-level purchasers will remain the leading orce.More balanced conditions will continue in the mid-to-upper price points. Te upper end is orecast toremain strong with sales surpassing 2009 levels, asconsumer confdence rises and as more people makethe move rom stocks and bonds into more tangibleassets. Te condominium market will remain healthyand balanced, with sales and price increases on par

with the overall market next year. Investors will remainactive, seeking out low-density, multi-unit residential

Manitoba

Winnipeg

on par with 2009 levels. With longer days on mar-ket in this segment, luxury buyers have more nego-tiating power and opportunity does exist or thoseprepared to make their moves. Buyers will con-tinue to beneft rom a good selection and time to

make decisions, while vendors can expect their homesto sell within the average days on marketi pricedcorrectly. Overall, the outlook or 2010 is upbeatsales are orecast to rise an additional fve per centto 3900 units, while average price resumes upwardmomentum, increasing two per cent to $285,000.

0

3,000

6,000

9,000

12,000

15,000

20082007 2009* 2010**

WINNIPEGResidential Unit Sales 2007 2010



6%-1%

Supported by one o the strongest provincial economiesin the country in 2009, resale housing activity in

Winnipeg continues to gain momentum. Sales werelight in the frst quarter o 2009, but the remaindero the year proved healthy and consistent as con-sumers demonstrated their belie in homeownershipand conidence in the uture. First-time buyersdominated the market, with demand outstrippingsupply, as evidenced by the 35 per cent o homes that

moved in multiple oers in October alone. With 48per cent o all sales occurring under $250,000 and83 per cent under $300,000, aordability and lowinterest rates have been a major impetus. Greaterstrength is starting to flter its way into the move-up and luxury segments, with 2009 a record year ormillion-dollar homes sales in Winnipeg. Close to15 million-dollar-plus properties changed hands(including one condominium) as o October fvemore than the previous record set in 2008. With allsegments o the market gearing up, Winnipeg ison course or solid growth next year.

Economic diversity has helped WinnipegandManitoba, in generalescape the recent recession

virtually unscathedone reason housing sales held upso well in 2009. Te citys unemployment rate hovers atsix per cent, well below the national average. Positivenet migration has and will continue to prop up demandor housing. Te introduction o the Provincial Nominee

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2008 2009** 2010***

WINNIPEGResidential Average Price 2007 2010



150000

200000

250000$250,000

$225,000

$200,000

$175,000

$150,00020082007 2009* 2010**

0

5,000

10,000

15,000

20,000

20082007 2009* 2010**

OTTAWAResidential Unit Sales 2007 2010



0%

11%

priced product across the board. ownhomes, condo-miniums, and low rise apartment units are growingincreasingly popular with this segment o the marketdue to price point. Revitalization in some o Ottawasolder communities is gaining momentum as entry-

level buyers choose to invest a little sweat equity in theirpurchases. Neighbourhoods such as Mechanicsvilleand Preston St. are areas to watch, with housing val-ues appreciating with every renovation completed.Experienced purchasers are also taking advantageo ideal market conditions to move up and over to alarger home, better neighbourhood, or dierent housingtype. Sales in the top end o the marketpriced inexcess o $750,000have been steady, with the numbero homes sold up moderately over 2008 fgures.

While real GDP growth is expected to all or the frst

time in more than a decade in 2009, a solid rebound inthe area o three per cent is orecast or 2010. New con-struction, including a new $21 million sporting event

venue and training centre in Rockland, is expected tobolster economic perormance in the New Year. Increasedenrollment at Ottawas our post-secondary institu-tions has also prompted additional capital expendi-tures, including a new $112 million, 15-storey towerat the University o Ottawa, scheduled or completionin 2011; two new buildings at Carleton University;a construction trades centre at La Cit collgiale,opening in 2010; and a new $70 million construc-

tion trades centre at Algonquin College. While theederal public service continues to provide a greatdegree o stability and security in Ottawa, there are

Ontario

Ottawa

properties, such as duplexes, triplexes and ourplexesas long-term investments. Te outlook or 2010 calls orsales to reach 12,500 units, up six per cent over 2009levels, while average price surges to a new record at$217,350, representing a our per cent increase.

1

Ottawas residential housing market is weeks awayrom posting its best year on record in terms ounit sales and average price. Despite a slower thanusual start to the year, more than 15,500 homes areexpected to change hands by year-end, up 11 percent rom 2008 levels, and fve per cent ahead o theprevious benchmark set in 2007 (14,739). Housing

values in the nations capital are also expected toclimb, appreciating ive per cent to $305,000 in2009, up rom $290,483 one year ago. Job securityand stable economic perormance are the major ac-tors inuencing those considering homeownership,a decision enhanced by rock-bottom mortgage rates.

While demand or housing has steadily increasedthroughout the year, supply has been an issue, withlimited inventory reported in many hot pocket areaso the city. First-time buyers continue to representthe lions share o activity, driving sales o aordably-


12/30


Kingston

concerns regarding continued layos within thehigh-tech sector. High-tech jobs have declined byabout 14 per cent year-over-year. However, Ottawasemployment rate is the highest o the 11 economicregions in the province. As such, unemployment levelsin Ottawa, at just under six per cent, are relativelystable and expected to remain well under the closeto nine per cent provincial average.

Given a continuation o sound economic undamentalsin the New Year, Ottawas residential real estate market

will stay the course. Te number o homes sold by

year-end is expected to match heated 2009 levels,while average price is expected to post urther gains,rising our per cent to $317,500 in 2010. First-timeand more experienced buyers are expected to work intandem, driving activity at virtually all price points.Despite an increase in inventory in the Spring,sellers market conditions should prevail through-out much o 2010. Low vacancy rates and volatilityin the stock market may also spur some investmentactivity in 2010, as investors seek multi-unit resi-dential property or a long-term hold.

0

1,000

2,000

3,000

4,000

5,000

20082007 2009* 2010**

KINGSTONResidential Unit Sales 2007 2010


3%-5%

2008 2009** 2010***

OTTAWAResidential Average Price 2007 2010

*Estimate **ForecastSource: CREA, Ottawa Real Estate Board, RE/MAX

250000

300000

350000$350,000

$325,000

$300,000

$275,000

$250,00020082007 2009* 2010**

1

Momentum is on the rise in Kingstons residentialhousing market. Te number o homes sold is expectedto close the year at 3,700 unitsdown fve per cent

rom 2008 levels, while average price is orecastto climb three per cent to $249,000, almost $8,000higher than 2008.

Although frst-time buyers were the frst to make theoray back into the market in the Spring, rising con-sumer confdence quickly had move-up and upper-end buyers ollowing suit. Te upper end, as a result,remains on par with year-ago fgures, and demand or

waterront properties, typically priced rom $500,000have held up well. A growing number o Kingstonrenters made the transition to homeownership in 2009,

given escalating rental costs. Low interest rates haveacilitated the move, and the trend is expected tocontinue going orward.

A solid employment picture has buoyed the Kingstonreal estate market, with the areas primary employersthe government sector, military, penitentiary, hospi-tal and university, to name a ewrelatively insu-lated rom the downturn. According to StatisticsCanada, Kingstons unemployment rate remains wellbelow the provincial average at about six per cent.A number o projects, planned or underway in Kingston,

will support the communityand the demand orresale housingnext year. Perhaps the most signifcant


13/30


is the recently announced $300 million investmentin deense inrastructure or CFB Kingston and theRoyal Military College by the Government o Canada.In addition, the City o Kingston has millions incapital and inrastructure projects in the works, withmore to come over the next several years, as they investin updates and revitalization. Private and public sectorinvestment continues as well, including upgrades toKingston General Hospital. Te citys ability to attractnew small business and its growing knowledge-baseand green-technology sectors is expected to providea substantial boost to economic perormance in

coming years.

Kingston is well-positioned or the year ahead.With airly balanced market conditions, buyers andsellers will be on relatively even ooting. Inventorylevels are improving. Days on market will remainconsistent in 2010, with the average property takingapproximately 60-70 days to sell. Multiple oers

will continue on well-priced, top quality productthroughout the city in both the entry-level andmove-up price point. he lower end o the mar-ket will be the most active, but momentum in the$240,000 to $350,000 price point is expected to pickup urther next year. Renters will continue to gravi-tate to homeownership beore prices and interestrates edge up once again. Demand or condominiums

will remain steady, with supply adequate in all priceranges. Prices in that segment will rise in tandem

with the rest o the resale market. Te upper endwill move ahead o 2009 sales levels, as the overall

Barrie & District

economy picks up steam, and as purchasers moverom stocks and bonds to the predictability o bricksand mortar. Investors will remain very active, alsomoving to more tangible assets. Some will look tocondos or small revenue properties, while others

are expected to buy residential homes close to theuniversity or the long-term, entering them in thestudent rental pool. Although pent-up demanddrove the market in 2009, rising consumer coni-dence and an improving business climate will helpkeep it fring on all cylinders in 2010. Sales will climb,rising three per cent to 3,800 units, while pricespost a urther increase o three per cent to a record$257,000 by year-end.

2008 2009** 2010***

KINGSTONResidential Average Price 2007 2010


200000

250000

300000$300,000

$275,000

$250,000

$225,000

$200,00020082007 2009* 2010**

1

Barries residential housing market has stabilizedsince March 2009, with sales and prices remainingconstant. Expansion o GO rain services into SouthBarrie helped bolster activity in Barrie and thesurrounding areas in 2009 as commuters rom theGreater oronto Area (recognizing the price andliestyle benefts) began packing up and movingnorth. Te combination o low interest rates, aor-dable housing values and greater selection proved

irresistible to local buyers as well. By September,despite a slow frst quarter, the market had caughtup to 2008 volumes (as consumer demand col-lided with higher inventory). Te balanced market,evident during the Summer months shited slightlytoward the seller in November, as supply dwindledheading into the holiday season. Virtually all segmentso the market were active by year-end, including theluxury segment priced over $500,000. Te numbero homes sold in Barrie and the surrounding areas isexpected to exceed 2008 levels, rising to 4,200 unitsby year-end 2009, up 3.5 per cent over one year ago,

while average price remains on par with 2008 levels.Housing values within Barrie city limits will alsomatch the 2008 fgure, settling in at $252,000.

While Barries economic perormance during 2009was relatively at, the prognosis or 2010 is upbeat. he recent introduction o a ive-year economicdevelopment strategy and action plan or Barrie is


14/30


activity in 2010. As consumer confdence trends upward,its anticipated that more experienced buyers will maketheir moves to either larger homes or downsize to bung-alows in low turnover areas or low-maintenance lake-ront condominium units. Te orward-thinking andongoing improvements being made to the citys water-ront areas have bolstered the sale o condos to emptynesters and retirees in years past, and this trend is orecastto continue as the citys dynamic plan or higher densityliving within the downtown core gains traction.

Kitchener Waterloo

expected to revitalize the downtown core and attractnew business to the city. o date, more than $250million in capital projects have been completed, withanother $227 million scheduled or 2010.

Barries employment rate is one o the highest inOntario, topped only by Ottawa. Although theunemployment rate has climbed three percent sinceone year ago (mirroring the provincial rate) thereare a number o projects underway that will shoreup the economy. Capital incentives recently under-taken include the $65 million expansion o GeorgianColleges Centre or Health and Wellness, a 165,000sq. t. acility, scheduled to open in September 2011.Once completed the college should create more than400 jobs. Te expansion o Royal Victoria Hospitaland the regional cancer care centre is predicted to

provide jobs or more than 1,000 upon completion.

Barries residential real estate market is expected toreect a stronger economic base in 2010, with homesales in the area holding at 4,200 units. Housing

values are orecast to edge up slightly over 2009 levelsin Barrie and the surrounding areas, climbing to$266,000 by year end. As all boats rise with the tide,average price within Barrie city limits should see similarappreciation, rising to $254,000 in 2010. Balanced marketconditions should prevail or much o the year, givenan ample supply o homes listed or sale. I inventory

levels all however, there could be greater upward pressureon average price. First-time buyersmany rom theGAare expected to once again drive homebuying

2008 2009** 2010***

BARRIE & DISTRICTResidential Average Price 2007 2010


250000

300000$275,000

$270,000

$265,000

$260,000

$255,000

$250,00020082007 2009* 2010**

Despite jobs losses in the manuacturing and automotivesectors, home buyers in Kitchener-Waterloo continuedto make their moves in 2009. Purchasers ventured intothe market with cautious optimism as early as April,taking advantage o record low interest rates and buyersconditions. Pent-up demand has also helped uel momen-tum, as ence-sitters moved o the sidelines and into themarket. First-time buyers led the charge or single amilyhomes throughout much o the year, with some move-up activity reported during the latter hal.

Several actors have helped prop up demand in Kitchener-Waterloo over the past year. Aordability continued tobe a primary actor, as savvy buyers took advantage oa avourable real estate climate and a good selection oinventory. Te citys resale house prices continued to attractout-o-town purchasers rom across the Golden Horseshoe,

who realized their money will go quite a bit urther, as

1

0

1,000

2,000

3,000

4,000

5,000

6,000

20082007 2009* 2010**

BARRIE & DISTRICTResidential Unit Sales 2007 2010


0%3.5%


15/30


well as amilies o university-bound students who optedto invest in the local housing market versus seeking outrental accommodation. Te citys tight vacancy rateat1.6 per centhas also actored in, prompting many toconsider the benefts o homeownership. Tat trend

is expected to continue into 2010.

Kitchener-Waterloos widely diversifed economy hasalso helped oset some o the downturn in manuac-turing, particularly with its thriving high-technologyand education sectors. An expanding population, urbangrowth and revitalization across the entire WaterlooRegion are positive variables supporting the resaleresidential segment going orward. By year-end,Kitchener-Waterloo should fnish out the year three percent ahead o 2008 levels at 6,300 units, while averageprice is expected to climb two per cent to $260,000.

While unemployment topped nine per cent in 2009,economic undamentals are set to improve next year.

Te manuacturing sector is orecast to progress, intandem with ongoing recovery south o the border.Some sense o stability, although tentative at present,has inally emerged in the turbulent automotivesector, with sales showing modest improvement.Over 2,000 well-paying job opportunities now existin the areas high technology sector. While a skillmismatch has let many positions vacant, the out-look is good as those jobs are illed over the next

several years. o that end, there has been signifcantinvestment in skills training into the community andin the areas post-secondary educational institutions.

Given a more positive economic perormance ore-cast or 2010, combined with demand that has beenrising steadily in recent months, the Spring market isexpected to be very strong. Tere has already been afrm transition to balanced conditions. Days on markethave allen 16 per cent to 46 days, and are expected tohold steady. Move-up buyers have become increas-ingly active, trading up to larger, better located homes,and will be a greater orce in the marketplace next year.

With a good supply o inventory and soter pricesin the upper end, sales are expected to improvenext year, as opportunities may prove too enticing

to resist. Investors will also play an increasing rolein 2010. Revenue properties are currently beingsnapped up almost as quickly as they become available,

with great interest rom oronto-area purchasers.Overall, sales in Kitchener-Waterloo are orecast toexperience a modest upswing, reaching 6,500 units.Average price will trend upwards once again, risingthree per cent to $267,800.

2008 2009** 2010***

KITCHENER WATERLOOResidential Average Price 2007 2010


200000

250000

300000$280,000

$270,000

$260,000

$250,000

$240,00020082007 2009* 2010**

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20082007 2009* 2010**

KITCHENER WATERLOOResidential Unit Sales 2007 2010


3%3%

1


16/30


he rebound that occurred in Greater orontosresidential housing market in 2009 was nothingshort o incredible. Having started the year a dismal

47 per cent o 2008 levels, sales steadily clawedback, with oronto poised to record its second bestyear on record. Purchasers who held o in the fnalquarter o 2008 and the frst quarter o 2009 quicklyacclimatized to new market realities and moved totake advantage o avourable lending rates. Yet, inven-tory levels proved a signifcant impediment, as sup-ply struggled to meet demanddown considerablyor much o the year. Buyers reused to be daunted,despite the re-emergence o the multiple-oer scenario.Activity continued to ramp up, with sales reaching10,955 units in Junethe second best month on re-

cord. Te city fnally eclipsed year-to-date 2008 salesin August. Te unprecedented momentum shockedeconomists and industry experts alike. In act, housingremained a steadast bright spot in a province thatexperienced among the worst o the economic turmoil.

Te strength o housing clearly defed the weakenedfscal oundation throughout the year. Pent-up demand

was the main driver o activity in 2009, given thethousands o purchasers who waited it out on thesidelines in 2008. Interest rates have been anotherprinciple actor, providing impetus at all price points.

Consumer confdence buoyed sales as positive eco-nomic indicatorshowever sporadicmade their wayinto the headlines. Rising prices have also served as a

0

20,000

40,000

60,000

80,000

100,000

20082007 2009* 2010**

GREATER TORONTO AREAResidential Unit Sales 2007 2010


1%

14%

2008 2009** 2010***

GREATER TORONTO AREAResidential Average Price 2007 2010

*Estimate **ForecastSource: CREA, TREB, RE/MAX

300000

400000

500000$450,000

$425,000

$400,000

$375,000

$350,00020082007 2009* 2010**

catalyst, as it became evident that there were no dealsto be had, despite the current economic uncertainty.

Although the global recession had little lasting im-pact on Greater orontos housing market in 2009,the economic recovery is expected to bolster resalehousing going orward. Overall, the GA is expectedto see housing sales reach 85,000 units, an increaseo 14 per cent over 2008. Average price may breakthe $400,000 mark by year end or hover slightlybelow that signifcant milestone.

Given that the GA boasts 40 per cent o the nationsbusiness headquarters, almost one-fth o the countrysgross domestic product, nearly hal o Ontarios GDP,and 40 per cent o all immigrants, any improvementrom an economic standpoint is bound to be elt at theconsumer level. Supporting growth in 2010 will be astregthened automotive sector, improved exports andcommodity prices, greater retail and consumerspending, and a signiicant investment in capitalprojects. he implementation o the HarmonizedSales ax (HS) in Ontario is expected to cause arun up in housing activity during the Spring market,as purchasers move to avoid additional expenses. Inthe longer-term, new construction is expected to beimpacted much more extensively, shiting some buyerdemand to the resale sectorat least until buyersadjust to the new normal.

1

Greater Toronto Area


17/30


Inventory levels in Greater oronto are expected toremain quite low, although some improvement will occurin the frst hal o 2010. Multiple oers will remain aactor, most evident on well-priced, well-located product,listed rom $300,000 to $700,000. Hot pockets will

continue to elicit bidding wars next year. Te phenom-enon will not be limited to single-amily homes, as de-sirable starter condominium units in prime locations

will also experience competition in 2010. O all typeso product, the upper-endpriced over $1 millionis expected to record yet another year o strong activity.Given the momentum that currently exists and the actthat all segments are now working in tandem, urtherincreases in sales and average prices are orecast or2010. Sellers market conditions will continue to prevail,

with both condominiums and single-amily homespredicted to experience a our per cent rise in prices in

2010, bringing average price to $415,000, while unitsales continue to edge higher, amid more avourableeconomic conditions, reaching 86,000 units.

the push or entry-level homes. During the six monthperiod, an estimated 80 per cent o sales occurredunder the $400,000 price point. By October, however,housing was fring on all cylinders, with virtually allsegments o the marketincluding the high end

working in tandem. Aordably-priced homes continuedto generate the greatest buzzwith demand or homesranging rom $250,000 to $325,000 in value particularlyheated. Prime neighbourhoods such as Hamiltons westend reported serious supply shortages, sparking multipleoers on well-priced properties across the board.

While balanced market conditions prevailed throughmuch o the year, the latter months leaned in avouro the seller. Local buyers, as well as a growing numberrom the oronto area, were most active. Te trendis expected to continue as housing values in oronto

edge upward. Inventory levels also presented some-what o a challenge in late 2009with the numbero homes listed or sale in Hamilton down approxi-mately 10 per cent rom 2008 levels.

Despite diversifcation in recent years, Hamilton-Burling-ton braced or the economic worst at the onset o therecessionyet, the worst ailed to materialize. Hamiltonheld its own compared to other areas o the province.Unemployment levels hovered in and around seven percent, well below the Ontario average or much o 2009.

Economic optimism ourishes as positive stimuluspours in to the Hamilton area. Te city was recentlynamed the second best place in Ontario to buy a houseby the Real Estate Investment Network, who mar-

veled at the entrepreneurial spirit that has emerged inthe cityciting McMaster Innovation Park, growth atMcMaster University, and plans or revitalizing thedowntown core the main impetus or the award.Site Selection magazine ranked Hamilton seventhamong Canadian metropolitan areas in attractingnew and expanded corporate acilities.

orontos successul bid or the 2015 Pan Am games willalso have a positive impact on the Hamilton area in com-ing years, with $150 million earmarked or a new stadi-um and our Olympic-sized pools. McMaster recentlyunveiled its Atrium buildingthe frst in McMasterInnovation Park to openand already more than 70per cent ull. Te CNME Materials echnologyLaboratory is also underway, a $60-million project

Hamilton Burlington

0

3,000

6,000

9,000

12,000

15,000

20082007 2009* 2010**

HAMILTON BURLINGTONResidential Unit Sales 2007 2010

*Estimate **ForecastSource: CREA, OMREB, RE/MAX

4%1.5%

1

Recovery is well underway in Hamilton-Burlingtonsresidential real estate market, with both unit sales andaverage price expected to surpass 2008 levels. Homesales are orecast to climb 1.5 per cent to 12,300 unitsby year-end 2009, while average price appreciates

three per cent to $289,000. Slow and steady growthcharacterized market activity throughout the Springand Summer months, with frst-time buyers behind


18/30


St. Catharines & District

scheduled to open in 2010. Renovation continues atLister Block, which is expected to act as a catalyst orurban revival. McMaster University has received a $33million provincial unding package to research nuclearand solar power. Hamilton Airport continues to expandits services as the largest cargo shipping airport in Canada.

With the economic undamentals o the area onthe upswing, the uture bodes well or residentialreal estate in Hamilton-Burlington. Approximately12,800 homes are expected to change hands in 2010,an increase o our per cent over 2008 levels. More and

more buyers are expected to venture into the marketas consumer confdence gains precious momentum.First-time buyers will continue to be an integralcomponent, uelling demand or homes priced be-tween $250,000 and $300,000 in areas like Hamiltons

west end and the Mountain. For those looking ormore aordable housing product, the citys east endoers up some o the best bargains, with single-detached properties available under $200,000. Condo-miniums should experience solid demand in the yearahead, in large part due to their aordable price point,starting at $230,000. Representing one in every fveresidential sales, the condominium liestyle has be-come the frst step to homeownership or many youngpurchasers. Supply is expected to remain balancedin 2010, slightly avouring the seller in hot pocketareas. Values are expected to climb as a result, withaverage price rising another our per cent to $300,000by year-end 2010.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

20082007 2009* 2010**

ST. CATHARINES & DISTRICTResidential Unit Sales 2007 2010


5.5%-7%

2008 2009** 2010***

HAMILTON BURLINGTONResidential Average Price 2007 2010


250000

300000

350000

20082007 2009* 2010**

$310,000

$300,000

$290,000

$280,000

$270,000

$260,000

1

While economic concerns served to dampen home-buying activity in St. Catharines and district inthe frst quarter o 2009, the market slowly gained

momentum throughout the Spring, Summer andFall months. Greater stability emerged as the buyermindset shited into more positive territory. Lowinterest rates, combined with soter housing values,prompted many purchasers to take advantage oideal market conditions. Move-up buyers were mostactive, picking up the slack in frst-time buying activity.Purchasers held the upper hand or much o the year,until the market transitioned to more balanced conditions.Reduced inventory levelsin all probabilitycon-tributed to stable housing values in October, November,and December. By year-end homes sales are expected

to hover at 2,700 units, slightly o 2008 levels, whileaverage price is orecast to edge up marginally, climb-ing one per cent to $224,000 by year-end.

2010 is shaping up to be a much better year or theSt. Catharines area.

While unemployment rates are expected to hover atapproximately nine per cent in 2010, job opportunitiesare orcast to increase. Government stimulus dollarsare predicted to kick into gear, with several capitalprojects now underway, including a $739 million

new hospital and regional cancer care centre; a $101million perorming arts centre; and a $28 millionparking garage. Brock University has been given the


19/30


Low interest rates were an important stimulus in2009, prompting those with jobs to take advantageo the most avourable market conditions in years.First-time buyers led the charge, seeking out aord-able condominium product and single-amily homes

priced between $150,000 and $200,000. More expe-rienced buyers joined the old in the second quarter,making moves to larger or better located homes.

While consumer confdence is on the upswing, therecovery has only just begun. London-St. Tomas isexpected to be weighed down by the ailing automotiveand manuacturing sectors and the high Canadiandollar in the short-term. Despite a return to positiveGDP growth or the city in 2010, increases in resalehousing transactions will be limited, as many tightentheir belts in preparation or the Ford plant closing

in 2011, expected to eect 1,600 workers and up toan additional 6,000 in related industries.

Tere is some positive news on the horizon, as thecity begins to see growth in other business sectorsincluding healthcare, education, the service sectorand inormation technology. Improvement in auto-motive exports, industrial goods, machinery andequipment are all expected next year, along withgrowth in the agri-ood sector. Te citys public andprivate sectors continue to make strong investmentsin the community, with an ongoing commitment

to inrastructure upgrades and revitalization o the

London St. Thomas

green light to move orward on a proposed bio-re-search acility valued at $109 million. Funding hasalso been set aside to improve transportation, roadsand highways, such as the fve-year expansion to theQEW and the widening o Highway 405.

Te current momentum is expected to build goingorward, translating into an upswing in residentialhousing sales in St. Catharines and district in 2010.

wo thousand, eight hundred and fty homes areorecast to change hands next year, an increase ofve per cent over 2009 levels. Move-up purchasers

should continue to prop up homebuying activity,while frst-time buyers play a secondary role. Condo-miniums are expected to remain a popular choice withempty nesters and retirees in the area. Althoughlistings are ew and ar between, apartment unitsin complexes such as Grand Deer Place will besnapped up quickly. By year-end, average price isprojected to hold steady, experiencing a modest increaseo one per cent to $226,000.

0

2,000

4,000

6,000

8,000

10,000

20082007 2009* 2010**

LONDON ST. THOMASResidential Unit Sales 2007 2010



3%-4%

2008 2009** 2010***

ST. CATHARINES & DISTRICTResidential Average Price 2007 2010



200000

250000$250,000

$240,000

$230,000

$220,000

$210,000

$200,00020082007 2009* 2010**

While London-St. Tomas was hit hard by the eectso the recent global recession, the resale housingmarket remained relatively stable throughout 2009.Sales, however, are expected to close the year our percent below 2008 levels at 8,000 units, while averageprice experiences a modest upswing o two per centto $215,000 rom year-ago fgures.

1


20/30


Sudbury

downtown core. Te University o Western Ontario con-tinues to experience solid growth, including a new buildingor its prestigious Richard Ivey School o Business.

Positive economic signs are starting to emerge, asthe unemployment rate in London ell or the frsttime in over a year in October, alling rom 11.2 percent to 10.8 per cent.

With some progress expected next year, residential realestate sales are orecast to hold up well. Sales shouldincrease a modest three per cent in 2010 to approxi-

mately 8,300 units, while average price sets a newrecord at $223,600, also representing a our per centincrease. Balanced market conditions could shitinto sellers territory next year, as listings o single-amily homes have been alling steadily. Multipleoers are expected to be limited, occurring mainlyin the tight $150,000 to $200,000 range. Te exodusrom rentals into homeownership is expected tocontinue next year. hat, in combination with ashortage o quality detached homes, will beneitthe condominium liestyle, as buyers look to thisalternative or price and better selection. Despiteincreased demand, prices will hold or condominiumsas a slight oversupply is absorbed. Te strength inthe upper end o the market is expected to remainconsistent, while investors snap up homes in the$200,000 to $250,000 price range or long-term holdand inclusion in the student rental pool. Duplexes,triplexes and our-plexes will sell quickly, i pricedcorrectly, as demand or revenue properties ramps up.

0

500

1,000

1,500

2,000

2,500

3,000

20082007 2009* 2010**

SUDBURYResidential Unit Sales 2007 2010



4.5%-8%

While greater economic stability has contributed tostronger residential activity in Sudbury in the fnalquarter o 2009, housing sales and prices remain well

below 2008 levels. wenty-two hundred homes areexpected to change hands by year end, down eightper cent rom one year ago, while average price isorecast to decline six per cent to $204,000, morethan $7,000 o the 2008 fgure.

Sluggish activity characterized the market earlyin the year. Housing sales picked up in the latterhal, as move-up buyers moved to take advantage olower interest rates and soter housing values. Dayson market typically hovered at 54, up considerablyrom one year ago, and expected to rise urther in

the New Year. he top end o the market, pricedin excess o $350,000 struggled year-over-year, butstarted to frm up in the fnal quarter. Momentumis orecast to build heading into 2010. Local andout-o-town investors are expected to capitalize onsome o the real estate opportunities that exist. Teintroduction o the Harmonized Sales ax (HS) ispredicted to create a urry o homebuying activityprior to the July 1, 2010 deadline. New constructionsales are expected to slow ater the HS arrives,

which should bode well or the resale housing market.Demand or renovated properties, or those built

within the last fve years, in particular, should expe-rience renewed interest.

2008 2009** 2010***

LONDON ST. THOMASResidential Average Price 2007 2010


200000

250000$250,000

$240,000

$230,000

$220,000

$210,000

$200,00020082007 2009* 2010**

2


21/30


Uncertainty in Sudburys mining communitygiventhe strike involving 3,500 workers at Vale Inco operations,the second largest mining company in the world,and upcoming employee contract negotiations with

Xstrata Falconbridge Nickel Mineshas translatedinto soter economic perormance in 2009.

Although Sudburys local economy has been heav-ily dependent on the mining sector, the city is relyingless on traditional industry and continuing to wel-come diverse new developments and businesses.Plans or the Northern Ontario School o Architecture

in Sudbury continue to move orward. Te NorthEast Regional Cancer Program at Sudbury RegionalHospital is complete and new developments such asSmart Centreshome to large chain retailers suchas Wal-Martare now open or business. Tese newprojects and developments are expected to boost thelocal economy, revitalize the city and attract hundredso new, specialized students to live, study and workin the Sudbury area.

As a result, the outlook or Sudburys residentialreal estate market is brighter or 2010.

Consumer conidence is expected to r ise, whichshould push home sales in the city to 2,300 units, a4.5 per cent increase over 2009 levels. Improvementin overall market conditions is expected to promptan inux o new listings. Te upswing in inventorylevels should keep average price appreciation incheckat $204,000in 2010.

Greater Montral

Qubec

0

10,000

20,000

30,000

40,000

50,000

60,000

20082007 2009* 2010**

GREATER MONTRALResidential Unit Sales 2007 2010


2%5%

2008 2009** 2010***

SUDBURYResidential Average Price 2007 2010

*Estimate **ForecastSource: CREA, Sudbury Real Estate Board, RE/MAX

150000

200000

250000$250,000

$225,000

$200,000

$175,000

$150,00020082007 2009* 2010**

Greater Montrals residential real estate marketcontinues to experience strong upward momentum,despite a slower than usual start to the year. Spurredby rock-bottom interest rates and growing consumerconidence levels, home sales are expected to top43,000 by year end, a fve per cent increase over the40,916 units sold in 2008. Average price is orecastto escalate urther, recording a three per cent increaseto $266,000 in 2009, setting a new record or the city.

Demand or homes on the Island o Montral remained

brisk or much o the year, uelled in large part bya continuous inux o frst-time buyers. Te city boastsone o the highest percentages o renters in the country,many o whom chose to venture into the market to takeadvantage o avourable market conditions this year.Aordability was key, with entry-level purchasersseeking product ideally priced between $200,000and $250,000. Single-amily homes in the suburbsrepresented the best value or the dollar, with a1,200 sq. t. home on a 5,000 sq. t. lot starting at$235,000. Semi-detached homes could be purchasedor even less, starting at $175,000 to $200,000 in

areas like Rosemere. Condominiumsan aordablealternative in the centre o the cityhave also seenan upswing in sales, particularly in recent months,

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tail product holds up. September 2009 marked thefrst decline in Qubecs unemployment rate in ninemonths, dropping to 8.8 per cent rom a fve-yearhigh o 9.1 in August.

Montralers continue to rea rm their aith in realestate and 2010 will be no exception. Te number ohomes sold is orecast to climb urther, rising anothertwo per cent to 44,000 units by year-end 2010.Housing values will continue their ascent, with averageprice poised to break yet another recordsettlingin at $272,000. Consumer confdence should serveto bolster housing activity, especially with improve-ment in economic perormance throughout the year.Look to frst-time buyersas well as move-up purchasersto act in tandem, driving the market, particularlyon the Island o Montral. Prices in the top end are

expected to stabilize urther, as a result, giving thegreen light to purchasers in that exclusive segment othe market priced in excess o $600,000. raditionalluxury strongholds such as Westmount, Outremont,and Mount Royal should experienced more balancedmarket conditions. Given strong demand and a limitedsupply o aordable product, the multiple oer isexpected to re-emerge, although not to the extentseen in 2006 and 2007. Investors will also take partin the rebound, sparking demand or income-pro-ducing properties such as our, six, and eightplexes.

While availability is limited, this type o housing is

the investment o choice or many who choose tolive in one unit and rent the remainder.

Qubec City

as the oversupply o units is absorbed. Inventory levelswere down in virtually every community by year-end.With housing values steadily increasing over thepast decade in Montral, real estate has proven to bea solid, long-term investment. Given the volatilityin the stock market over the past 18 months, moreand more investors in the Montral area are turningto tangible investments like bricks and mortar.

Consumer conidence in the province overall hasheld up relatively well, with retail sales and homeprices perorming above the national average. Non-

residential construction also continues to supportthe provincial economic underpinning, with a fve-

year $42 billion public inrastructure spendingprogram in place.

Yet, the province has not emerged unscathed romrecent recessionary woes. Te manuacturing sector,in particular, has aced some serious challenges. Asa result, real GDP growth is expected to contract1.9 per cent in 2009, rebounding by 2.2 per cent in2010, as demand or exports slowly improves. Tegrowth, however, will be tempered by reduced capitalexpenditures in 2010, particularly in the private sector,resulting in GDP growth perormance below thenational average next year.

While recovery is expected to be slow, positive indica-tors have contributed to an increase in consumer andbusiness confdence, especially as the resale housingmarket continues to strengthen and demand or re-

2008 2009** 2010***

GREATER MONTRALResidential Average Price 2007 2010


200000

250000

300000$300,000

$275,000

$250,000

$225,000

$200,00020082007 2009* 2010**

Qubec City is expected to post the best year onrecord or residential housing sales in 2009. Heateddemand or real estate throughout much o the yearcontributed to the 11 per cent upswing in sales, with anestimated 14,000 units orecast to change hands in 2009.Average price will break the $200,000 threshold, climbing to $206,000, an eight per cent increase over 2008.

Consumer confdence remains very strong in the city,which barely seemed to notice there was a considerablerecession aecting the rest o the country. QubecCity went on to record positive GDP growth, nearone per cent in the irst quarter o 2009. Drivingthe momentum is a stellar outlook or the area.

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Its 400th anniversary celebrations put the economicengine in overdrive, as the city prepared with unprec-edented capital works and reurbishment projects.As the event drew to a close, the city embraced thenew standard, using the opportunity to maintain or-

ward progress, positioning itsel ideally or the uture.

Propping up demand in Qubec City has been anextraordinary employment picture, with one o thelowest unemployment rates in the country at 5.2per cent. Te diversifed economy serves to attractnew business and continues to expand with growthin the inance, insurance, lie sciences, real estate,healthcare, construction, composite materials andelectronic components manuacturing, as well asthe high-technology sector and communications.Inrastructure and revitalization improvements cur-

rently underway are breathing new lie into the area.Tis is particularly true o Qubec Citys east side,which has undergone an impressive transormation,attracting young, frst-time buyers and many desirablesmall businesses to its newound trendy status.

Homeownership rates have been on the rise in recentyears in Qubec City, with the number o ownedhouseholds rising rom the low 30 per cent rangein the 1996 and 2001 census reports to 50 per centin 2006. Tat upward trend continues as a growingnumber o irst-time buyers have been entering

the market, snapping up homes in the $200,000 to$250,000 price point. Many have been attracted tothe prices and modern air o the newly revitalized

east side, where it has become very commonplaceor homeowners to invest a great deal o sweat equityinto renovating their new digs. Demand or condo-miniums is expected to remain strong in 2010, asthis segment remains key to providing an aordableentry-point into the market or many.

As homeownership grows and the city propels itselinto the uture, Qubec City is just starting to catchup in terms o price appreciation. Aordability hasprompted serious move-up activity throughout the year,given current low interest rates. Te trade-up segment

is expected to play an increasing role in 2010. Multipleoers or well-priced, quality product will remaincommonplace across the board. Te upper end willsurge ahead next year, with sales above $500,000up over last years levels and homes priced over$750,000 starting to move well. Investors will con-tinue to be active in Qubec City, with low-densitymulti-residentialup to an eight-plexvery popularbut in short supply. One recently listed six-plex saw21 visits on the frst day and eight oers. Te market isexpected to be slightly more balanced next year, withinventory levels picking up. Days on market will riserom 84 on average to approximately 90. With theeconomy set to improve throughout the province in2010, resale housing activity is orecast to rise anadditional our per cent to 14,600 units, while averageprice climbs six per cent to $218,300, eclipsing theprevious record.

0

3,000

6,000

9,000

12,000

15,000

20082007 2009* 2010**

QUBEC CITYResidential Unit Sales 2007 2010


4%

11%

2008 2009** 2010***

QUBEC CITYResidential Average Price 2007 2010



150000

200000

250000$250,000

$225,000

$200,000

$175,000

$150,00020082007 2009* 2010**

2


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three-month moving average unemployment rateor Haliax-Dartmouth was 6.8 per cent according toStatistics Canadawell below the national unem-ployment rate.

Its steady-as-she-goes reputation will remain intactthrough year-end, as Haliax-Dartmouths resalemarket is poised to fnish 2009 slightly below 2008levels at an estimated 6,250 units. Average price isorecast to remain stable at approximately $239,000.

With recent demand improving month-over-monthand consumer confdence on the rise, activity is set to

ramp up into the New Year. Days on market are ex-pected to decrease, ater a continuous rise throughout2009. Te frst-time buyer segment will once againlead the charge in 2010, while the move-up seg-ment is on the cusp o an upswing, as momentumbegins to flter more strongly through all price levels.

With balanced conditions overall, multiple oers willcontinue to be the exception in 2010. Buyers willbeneft rom the luxury o time in making decisions,

with many viewing a dozen properties or more beorecommitting pen to paper. Renewed growth in the pro-

vincial and local economy will help buoy the upper-end next year, with luxury sales expected to eclipse2009 fgures. Te condominium segment, hit harder bythe slow down earlier in the year due to an oversupply,

will begin to improve. Prices are set to stabilize, whilehigh end product will continue to recover equity. Onesegment o the market that has increased consider-ablythe investment segmentwill remain strongthroughout 2010. Tere has been a notable uptick

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20082007 2009* 2010**

HALIFAX DARTMOUTHResidential Unit Sales 2007 2010


6%-3.5%

Nova Scotia

Halifax Dartmouth

Te tide is beginning to change in Haliax-Dartmouthsresidential real estate market. Dominated by buyersor most o 2009, there has been a gradual transitionto a more balanced market as year-end approaches.Consumer confdence has been steadily increasing,as purchasers ock to take advantage o low interestrates. While buyers market conditions exist in manyareas, the trend is not expected to spillover into 2010.In act, the lower-to-mid price ranges, which havebeen most active, have already shited to balancedor sellers conditions in sought-ater pockets. he

climate remains cautiously optimistic.

Despite recessionary concerns, activity in the resalehousing sector has been relatively healthy. Tis, in largepart, is due to the stability o Haliax-Dartmouthsmain employersgovernment and the militarywhotend to be more insulated rom the volatility experi-enced in other industries. In addition, the city boastsa widely diversifed economic base and continues toexperience solid growth through migration. Buildingactivitymultiple residential, industrial, institutionaland commercialhas remained resilient, with billions

in investment, either upcoming or ongoing, rom boththe public and private sectors. he October 2009

2008 2009** 2010***

HALIFAX DARTMOUTHResidential Average Price 2007 2010



200000

250000$250,000

$240,000

$230,000

$220,000

$210,000

$200,00020082007 2009* 2010**

2


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in the number o people seeking out small invest-ment properties as a long-term hold. Any listingsthat provide income potential are moving quickly.Clearly, savvy purchasers are realizing opportunitiespresently exist and are taking advantage beore the

window closes. Yet, with the orecast calling or6,600 unit sales in 2010, as average price climbs toa new record at $243,000, the window has alreadybegun to narrow.

lull in the market and low interest rates to trade-upto a larger home. Out-o-province buyers and newimmigrants have helped to oset the decline infrst-time buyers on the Island in recent months, buttheir numbers are too small to make a signifcantimpact on overall housing sales.

Equally important has been the decline in consumerconfdence levels. Tis is especially true given thatbuying a home is one o the largest fnancial com-mitments most people will make in their lietime.Market uncertainty is preventing many rom real-

izing homeownership this year.

Te good news is that the lingering eects o therecession may soon be part o the past. Following anestimated 0.1 per cent modest contraction in GDPin 2009, Prince Edward Island is orecast to returnto positive territory in 2010, with GDP rising asmuch as two per cent, reecting a recovery that isexpected to be somewhat reserved in nature.

Te strongest stimulus to the provinces economicengine next year will be capital expenditures, with$130 million set aside or public inrastructure proj-ects in 2010part o a fve-year $510 million plan.Construction is well-underway on the $45 millionHomburg development in downtown Charlottetown,including an eight-storey commercial o ce tower anda 10-storey boutique hotel, scheduled or completionin December 2010. In addition, the province is expect-ing greater ederal unding, including an increased

0

500

1,000

1,500

2,000

20082007 2009* 2010**

PRINCE EDWARD ISLANDResidential Unit Sales 2007 2010


0%-17%

Prince Edward Islands residential real estate peror-mance can best be characterized as lacklustre in 2009,despite a sot economic landing or the province.Approximately 1,000 homes are expected to changehands by year-end, down 17 per cent rom 2008, and

well o peak 2007 levels. Average price remains stableat $150,000, experiencing no change rom one year ago.

Te housing slowdown can be directly attributed to twoactorsthe decline in frst-time buyers and waningconsumer conidence. he all-important kickstartsegmentthe entry-level purchaserhas to some

degree disconnected. Once a driving orce, frst-timebuyers have taken a backseat to move-up purchasers,many o whom are taking advantage o the current

2008 2009** 2010***

PRINCE EDWARD ISLANDResidential Average Price 2007 2010


100000

150000

200000$200,000

$175,000

$150,000

$125,000

$100,00020082007 2009* 2010**Prince Edward

Island

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equalization allotment. ourism and exports are alsoexpected to improve going orward, as the weight othe recession on key industries slowly eases.

Moving orward, Prince Edward Islands residential

real estate market is orecast to experience measuredgrowth in 2010. Consumer confdence is expected toreturn to the Island as economic perormance improves.

While cautious optimism will be the order o the dayat least in the frst hal o 2010pent-up demand

will continue to build. Look or a urry o activityin the Fall as frst-time buyers, secure in the uture,move to realize homeownership beore interest rates andhousing values climb. By year-end, the number o homessold in the province is expected to match 2009 levels,

while average price remains unchanged at $150,000.

Capital investment and a strengthening U.S. economyare expected to uel New Brunswicks recovery in2010, giving rise to increased demand or exports andrising commodity prices next year. Tis is expectedto oset some o the impact on the provinces energy,

mining, orestry and fshing industries, which werehard-hit by the recession, contributing to a orecasted0.8 per cent contraction in GDP by year-end 2009.

Several signiicant economic drivers will provideimpetus going orward. A $1.2 billion governmentspending program, the $1.4 billion investment in thePoint LePreau nuclear plant upgrade,

Housing Market Outlook 2010

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