Vancouver posts healthy year-over-year price increases
Royal LePage forecasts Vancouver's house prices will decline 6.5 per cent in 2012 as a result of growing inventory and decreasing year-over-year unit sales
VANCOUVER, July 10, 2012 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed healthy year-over-year price appreciation for both standard two-storey homes and detached bungalows, while the standard condominium market posted modest gains. However, signs of a slowing market have appeared in the second quarter.
Detached bungalows posted the largest average year-over-year price increases, rising 6.0 per cent to $1,087,125. Standard two-storey homes rose 5.8 per cent year-over-year to $1,178,750, while standard condominiums climbed 1.6 per cent year-over-year to $507,000.
"As housing markets are seasonal, the most accurate means of measuring activity is using a year-over-year comparison," said Bill Binnie, broker and owner of Royal LePage North Shore. "However, it is important to note that the year-over-year gains that we witnessed this quarter were made earlier this year and late last year. Although the second quarter year-over-year price gains are not new gains, it is notable that they have been sustained despite rising inventory levels."
Binnie noted that there has been less activity from mainland Chinese buyers who were active in the upper-end of the market while the condominium market has been struggling.
"Recent regulatory changes to mortgage lending rules will also likely dampen Vancouver's housing market activity," said Binnie. "Vancouver's house prices are the highest in the country and raising the bar will keep a few prospective buyers on the sidelines. It's a hard housing market to get into and every little bit helps."
Chris Simmons, broker and owner of Royal LePage Westside & City Centre, commented that demand in East Vancouver as well as the overall lower-end of the market is still vibrant.
"The lower-end of the market is still being fueled by low interest rates," said Simmons. "We do expect overall house prices to cool in the second half of the year. This will provide some relief and an opportunity for buyers who last year thought home ownership was completely out-of-reach."
Simmons noted that inventory levels were up approximately 25 per cent.
"Our current level of inventory is offering buyers a lot of choice," said Simmons. "It's a great time for negotiating."
Looking ahead to the end of 2012, price appreciation in the Vancouver market is expected to decrease 6.5 per cent compared to 2011.
Nationally, in the second quarter, standard two-storey homes rose 4.7 per cent year-over-year to $408,423, while detached bungalows increased 5.5 per cent to $376,311. Average prices for standard condominiums increased 3.3 per cent to $245,825. During this period, signs from across the country clearly indicated that the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.
"We have had three years of solid house price appreciation in almost all regions of the country," said Phil Soper, president and CEO of Royal LePage Real Estate Services. "Confidence in Canada's real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates."
The first-time buyer segment of the population, which represents up to half or all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.
"The most recent set of mortgage changes, the fourth in four years, is also the most aggressive. The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord. The timing of this intervention was unfortunate," added Soper.
About the Royal LePage House Price Survey
The Royal LePage House Price Survey is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey which highlights house price trends for the three most common types of housing in Canada in 90 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the second quarter 2012. A printable version of the second quarter 2012 survey will be available online on August 9, 2012.
Housing values in the Royal LePage House Price Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts.
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of 14,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's & children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.
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