remax wrote the report

 -----Original Message-----
From: 	Dorland, Dan  
Sent:	Wednesday, December 12, 2001 8:38 AM
To:	Borg, Jeff; 'kdorland@flint-energy.com'; Dorland, Chris
Subject:	Strong decade foreseen for real estate 

December 12, 2001
Strong decade foreseen for real estate 
'Demand for all types of housing is set to surge': Aging Baby Boomers, their children and immigrants to drive residential prices
Paul Vieira 
Financial Post 
The tail end of the Baby Boom generation, along with children of aging boomers and new immigrants to Canada, will keep the residential real estate market strong over the next 10 years, driving the average value of a house up 13%, a new study suggests.
"Demand for all types of housing is set to surge ahead over the coming decade, leading to robust activity, rising prices and a stable investment climate," says the study, jointly written by ReMax Ontario-Atlantic Canada, ReMax Western Canada and Clayton Research.
And Calgary will have the hottest real estate market, with housing prices set to climb 20% to 25% in the next decade, the study says.
Overall, the number of households will increase by 1.5 million over the next 10 years, leading to rising prices for existing homes and steady demand for newly built homes.
Peter Norman, vice-president of Clayton Research, a Toronto-based real estate consulting firm, said the increase will be fuelled by three factors: younger Baby Boomers, between the ages of 35 to 45, who are looking to buy their first home or upgrade from their current residence; the children of the older Boomers, generally 45 to 55, who will be entering the real estate market for the first time; and immigrants.
"Housing prices will remain quite firm over the next 10 years and move up in real terms" Mr. Norman said in an interview.
The combination of high rents and low rental vacancies, particularly in cities such as Toronto and Vancouver, will also help drive the housing market, as will the fact that there has been little or no construction of new rental units.
And mortgage rates are so low that buying is often as financially palatable as renting, Mr. Norman added.
The study concluded that the economy, although in a slump, is in much better shape than it was at the eve of the 1990s recession. Productivity and real income growth have recovered, unemployment is at lower levels than a decade ago, and the country's industrial structure has shifted away from a commodity and manufacturing base, the study said.
"A healthy, long-term economy will boost housing markets by keeping real incomes growing, real interest rates low, and providing confidence in the future performance of real estate assets."
Pamela Alexander, chief executive of ReMax Ontario-Atlantic Canada, said Calgary would be the hottest market in the country thanks to increasing oilpatch activity, migration from other parts of the country and its youthful population.
"Calgary is going through its renaissance period," Ms. Alexander said, adding that its average home price of $180,000 is still 30% to 35% cheaper than Vancouver or Toronto.
Toronto, with its average house price of $250,000, should see growth of 10% to 15%, Ms. Alexander said, because its population is heavily weighted toward 25 to 40 year olds -- who will buy their first home or upgrade -- and because of the scarcity of rental units.
Meanwhile, Ottawa, despite the high-tech downturn, remained one of the hottest housing markets with prices up 10% from a year ago. That market is expected to grow as the federal government increases spending and creates new departments, older civil servants retire and new people are brought in, and the high-tech sector rebounds.