Canada’s inflation-adjusted average home prices have risen 85% since 1998, according to a global real estate report released by Scotia Capital today.
The relatively smaller cumulative price increase compared with some of the frothiest markets (Ireland’s real house prices soared almost 330% between 1992 and 2007) reflects in part a later take-off. The report states that Canada’s residential real estate boom started several years after other countries because it was still feeling the effects of the early 1990s recession and the weak labor market that persisted for a few years afterward. For comparisons sake, U.S. real home prices increased 50% in the 10 year span from from 1995 to 2005.
Interestingly, Scotia highlights that the cycle of rising real home prices is fairly long, lasting on average 12 years. The shortest boom was Italy’s at 8 years, with Ireland & Sweden the longest at 15. Canada falls in the upper-middle of the pack, with its housing boom in its 13th year.
Canada still remains an outperformer in contrast with other nations tracked, with real home prices up 4.8% y/y in Q3. Though interest rates are still in “ultra-low” territory, economic uncertainty combined with some recent slowing in the pace of hiring could dampen demand going forward in 2012.
You can read the entire report here