The most popular people in Canada are those who are thinking about selling their homes. Across the country, it's a sellers market as inventory struggles to keep up with demand. Reports from the country's two largest real estate companies suggest there is no end in sight for the real estate boom, and that Canadian real estate is now attracting more attention from U.S. buyers.

"Canada is in an enviable position whereby our real estate market is outperforming the United States, where affordability has slipped," says Sherry Chris, executive vice-president of Royal LePage Real Estate Services. "A loss of confidence in the stock market and the disturbing number of corporate bankruptcies is negatively impacting American's confidence. Consequently, Canada is a real estate haven for U.S. as well as international investors, who are purchasing both residential and recreational property.

Nowhere is this trend more pronounced than in Kelowna, B.C., which co-incidentally is the location of the head office of Re/Max of Western Canada. Re/Max says Kelowna is the hottest real estate market in the country, with sales up close to 40 per cent from one year ago, and average prices rising by more than 14 per cent. The Re/Max report released this week says, "The recreational property market in the Okanagan Valley in particular has attracted interested buyers from the United States and Europe, who have driven sales of waterfront properties up 19 per cent and prices up 33 per cent respectively. With its population of 120,000 and abundance of clean lakes, Kelowna is a natural vacation destination for many travelers."

The report says low borrowing costs and high consumer confidence is also boosting local interest in the real estate market. "In many cases, properties are sold in-house -- never making it to the MLS system," Re/Max says.

Another Canadian market that is unexpectedly benefiting from U.S. buyers is Montreal. Diane Menard, area manager for Royal LePage Heritage, says, "Montreal's housing market continues to benefit from the lagging stock market. In particular, there have been a number of home sales to buyers from other provinces as well as from the United States. Some of these purchasers have relocated to Montreal, while others are renting the property with the intention of moving here in the future." Menard says that, "Beyond the economic fundamentals and world events that likely influenced this trend, we believe that the strong presence of the film industry has elevated Montreal to the attention of an international audience."

Foreign investment in Vancouver, Victoria and Canmore in B.C., and on Canada's east coast, continues to have a significant impact. But Canada's housing markets have not needed buyers from outside the country to maintain its torrid pace this year. With historically low mortgage interest rates and rising consumer confidence as the backdrop, demand has been strong all year. Re/Max says that across the country, "virtually every housing market reported a lack of quality homes listed for sale." It says this has led to multiple offers on homes in major Canadian cities, as well as in some smaller housing markets such as Halifax, Nova Scotia, Regina, Saskatchewan, and Thunder Bay and Sudbury in Ontario.

"Despite some softening in home sales during the traditionally slower summer months, activity from Victoria, B.C. to St. John's, Newfoundland is expected to experience a mini-surge from late September to mid-November," says Pam Alexander, CEO of Re/Max Ontario-Atlantic Canada.

Chris says: "Talk of a real estate bubble is groundless in our opinion, as the current Canadian economy is almost airtight, firing on all cylinders, pumping consumer confidence and driving the sale of significant purchases like homes and luxury cars. We anticipate a strong finish to the year in the resale housing market."

Canada Mortgage and Housing Corp., the country's federal housing agency, is forecasting a record number of existing home sales for 2002. It predicts that by the end of the year, real estate prices will have appreciated by an average of seven per cent over 2001.

Published: September 26, 2002

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He is also consulting editor of Homes & Cottages, Canada's largest building and renovation magazine. Email jimhc@pathcom.com.