Nov 8, 2011 – 6:43 AM ET | Last Updated: Nov 11, 2011 8:43 AM ET
Channel surfing on any given night, it’s easy to think home renovation and real estate flipping is an abiding national obsession. Turns out, it is. A new study of residential construction and renovation over the past decade shows a doubling in the value of a Canadian home. Across 16 major markets — from Toronto becoming the continent’s condo capital to Regina’s nation-leading price surge; from Hamilton’s industrial rejuvenation to Vancouver bungalows being flattened by large custom builds — Canada’s love of their homes is transforming the landscape, with rises highest in Western Canada, according to Housing Evolution, a report by RE/MAX real estate. Adrian Humphreys notes the trends and highlights:
From 2000 to 2010, the average value of a Canadian home doubled, rising to $339,030 from $163,951. The money involved is huge, with the value of residential building permits issued across Canada in the past decade pegged at $340-billion. But even that huge figure is eclipsed by the cash pushed into home renovations in the same time period — estimated to be $450-billion. The TV shows know a good market when they see it.
Regina topped the list of surging housing prices. The average price of a home rose 173%, climbing to more than $258,000 from $94,518 in 10 years. Much of the increase comes from new construction, with building permit values exceeding $1.6-billion, triple the amount in the preceding decade, according to the report. And it is not abating. The first half of this year saw $172-million in building permit value being issued. The rise has hit renters hard, with the city’s tenants shelling out rents approaching those in much bigger cities. Edmonton saw the second highest price appreciation (165%), followed by Saskatoon (163%) and Winnipeg (158%).
FUTURE HOT SPOT
Winnipeg is seen as having the biggest potential for future growth, as it leads the nation with having the largest stock of older homes. More than half of the city’s owned housing was built before 1970. The report points to increasing building permit values in recent years, the city’s 25-year strategic plan and the rejuvenation from the return of the NHL as boosting future new construction and renovation — and expected rising prices.
In Vancouver, small bungalows on large lots have been snapped up only to be torn down. A trend to maximize a home’s footprint means large, custom-built homes are going up in their place, providing more square footage of living space but considerably less lawn and garden. The change, the report says, is transforming what were once working-class subdivisions into trendy enclaves of large, upper-end homes, the report says. At the same time, one in every two homes sold in Greater Vancouver are condos, with an average condo price of $457,887.
Toronto’s skyline has been transformed by high-rise condo development in recent years, flooding the downtown with high density housing. There was a 212% increase in the number of units sold between 2000 and 2010. The condo craze ranges from modest pads for young, first-home buyers to the most expensive sale in the city, the $28-million penthouse of the Four Seasons Residences. “Toronto has become the largest condominium market in North America,” said Michael Polzler, executive vice-president of RE/MAX Ontario-Atlantic Canada. With so much condo development, it has increased demand for single-family detached homes in core neighbourhoods, led by Leaside, where house price rose by 111%.
Hamilton is an “ongoing project in renewal,” says the report, making the area an “underestimated up-and-comer.” The total value of residential building permits nearly doubled in the decade, exceeding $6.5-billion. The attraction to Hamilton has been fuelled by plenty of large, solidly built detached homes that are increasingly unattainable in Toronto, less than an hour away. The city has also been pushing the redevelopment of its brownfields for residential and mixed use projects and condos have been enthusiastically embraced, representing 24% of housing sales.