Weather isn't the only thing that is getting warmer in Canada these days. Across the country, real estate markets are heating up and housing prices are on the rise. A strong economy and solid employment rates have strengthened demand in most communities. Many Canadians may have been spurred into real estate purchases by rumblings of interest rate hikes.

Disillusionment with technology stocks has contributed significantly to revitalized real estate markets. After a lengthy haul as an unattractive investment when compared to high-return stocks and funds, housing is now seen as a safe haven from the rollercoaster ride stock markets have taken investors on.

Canada Mortgage and Housing Corporation (CMHC), the federal housing agency, reports the end of the stagnant real estate markets of the nineties and it says markets will improve this year and in 2001. CMHC predicts that sales of existing homes will hit record levels, rising slightly to 335,700 this year and 343,200 in 2001. The average Multiple Listing Service selling price is expected to increase from the 1999 value of $158,082 to $164,300 in 2000 and $170,500 in 2001.

Over the next five years, CMHC calculates that new home construction will benefit from favourable economic conditions, rising migration and consumer confidence. New housing starts in Toronto will reach 37,000 this year, representing half the homes built in Ontario. CMHC expects housing starts will also increase in Montreal and in Vancouver, where housing was depressed by the Asian economic downturn and the "wet condo" fiasco.

But CMHC does not forecast smooth sailing in every real estate market in Canada. Increased housing starts predicted for the Atlantic region this year reflect the positive effects of megaprojects but CMHC says the market will slow in 2001 as benefits from megaproject spending subside. Although Prairie markets are expected to remain at relatively high levels in Alberta, Saskatchewan and Manitoba, concerns are that Alberta's high condominium inventories may cool that market this year. During 1999, Ontario experienced its highest new home levels since 1989 but increases are expected to move at a more moderate pace in 2000 and beyond.

The real estate adage about 3 things determining real estate value -- location, location, location -- still seems to hold true in Canada's spring markets. Instead of across-the-board, double-digit increases, specific neighbourhoods in an area experience greater price increases than others. If you are home shopping in these multiple-offer locations, make sure you are up to date on price trends so that you do not get swept into a bidding war for a home that does not reflect local real estate patterns.

Published: May 9, 2000

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Futurist and Strategist PJ Wade is "The Catalyst" -- intent on "Challenging The Best Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 7 books and more than 1600 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy... Your Choice! (CatapultPublishing.com), which is filled with suggestions and insight on protecting and using home equity. Her new business book, "What's Your Point?," which identifies 7 common mistakes professionals unknowingly repeat to their detriment, will be published in 2009. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more on blogs, books and topics, visit TheCatalyst.com.