- Average house prices set to rise by 9.5 per cent nationally -
TORONTO, July 5 /CNW/ - Canada's resale housing market finished the
second quarter on strong and steady footing; surprising many by its astounding
momentum. Healthy and robust conditions are expected to prevail through to
year's end as all regions are poised to experience a rise in average house
prices, with double-digit gains forecast for Edmonton, Calgary, Winnipeg and
Regina, according to a report released today by Royal LePage Real Estate
Services.
Echoing the growth and activity experienced in all Canadian markets in
the first half of the year, the national average house price is forecast to
rise by 9.5 per cent, passing the $300,000 mark for the first time, to
$303,300. Home sale transactions are projected to rise by 8 per cent to
522,306 unit sales by the end of 2007.
"The momentum from the year's extraordinary start spilled into the second
quarter, compounding typically busy spring market activity and stimulating
solid price appreciations in almost all regions of the country. These
conditions will certainly be an impetus characterizing Canada's real estate
market through to year's end," said Phil Soper, president and chief executive
officer, Royal LePage Real Estate Services. "As we move into the second half
of the year, we continue to expect areas of aggressive price appreciation in
the west, and modest, mid-single digit price increases in Central and Atlantic
Canada."
Added Soper: "The most profound story in Canadian real estate today is
the extraordinary interest that people across our country continue to have in
buying and selling homes. The sheer number of homes trading hands this year
has far exceeded consensus expectation. This market continues to show strength
as we move into the second half of the year."
New to the stage of regional players exhibiting extreme home sales
activity and searing house price increases is Saskatchewan. Record numbers of
homes sold in both Regina and Saskatoon in the second quarter as intense
demand was driven by a swell of in-migration of Saskatchewanians returning
from expensive Alberta living. These frenetic conditions are expected to
continue, albeit at a slightly more temperate pace.
Energy rich Alberta's potent economy continued to attract in-migration;
however, the runaway prices and activity that have characterized Calgary and
Edmonton for the past eighteen months have started to ease and will continue
to return to more manageable conditions as the year presses onwards. Most
notable during the second quarter was the change in Calgary's inventory
levels, which increased substantially as some sellers decided to cash in on
their home equity. This increased supply, combined with the natural dampening
effect that high prices have on demand, is leading to more balanced conditions
and a stabilizing of average price appreciations.
Looking ahead, Central Canada should continue to enjoy balanced market
conditions. More modest increases can be expected as we move into the
traditionally slower second half of the year. The combination of healthy
regional economies and job markets, population growth and the recognition that
real estate is a sound investment, will continue to attract buyers and bolster
demand for housing.
In Toronto, an unseasonable spike in activity may occur in the fall as
some buyers react to the city-proposed increase in land transfer taxes for the
area, jumping into the market before the proposed taxes are to go into effect.
Anticipated growth of the oil sector in St. John's, Saint John and
Fredericton is expected to create an abundance of jobs in Atlantic Canada and
maintain the buoyancy of the eastern market, compensating for the significant
loss of trades people who have flocked to Alberta.
"During the first half of the year, strong economic fundamentals fuelled
consumer confidence and reasonable affordability drove housing demand across
the country. In most provinces, inventory levels were up slightly
year-over-year, helping to balance the national market," commented Soper.
Of the housing types surveyed, the highest average price appreciation
occurred in detached bungalows, which rose by 15.4 per cent to $338,738,
followed by standard two-storey properties, which rose to $399,469 (13.2%),
and standard condominiums, which increased to $238,784 (15.1%),
year-over-year.REGIONAL MARKET SUMMARIESThe housing market in Halifax maintained its strength during the second
quarter and is expected to remain healthy through the remainder of the year.
First-time buyers drove much of the quarter's market activity, with properties
priced under $300,000 in greatest demand.
The housing market in Moncton experienced strong sales activity during
the second quarter, while a decrease in listings helped push the market in the
seller's favour. Affordability remains good in Moncton as the city offers the
most affordable real estate in the province. The market is expected to remain
strong for the rest of the year with prices increasing slightly and sales
activity continuing to flourish.
Saint John's robust economy and high consumer confidence helped fuel real
estate activity prompting average price increases during the second quarter.
Saint John is gradually becoming the energy hub of the east coast as a new oil
refinery has been built and projects, such as the refitting of the nuclear
generating plant are slated for the near future.
In Charlottetown, the housing market experienced a strong start to the
second quarter and began to moderate towards the quarter's end, resulting in
modest average price increases. Contributing to the slight decrease in
activity during the quarter was the provincial election, which resulted in a
new government. The three year freeze on assessments that the new government
is imposing should also help the market conditions.
Activity in St. John's remained stable and average house prices increased
during the second quarter, as the city began to experience a shortage in
inventory. A strong economy and high consumer confidence were supported by the
recent excitement that the long awaited local oil project Hebron Ben Nevis is
on again. Affordability is good and there is nothing to indicate anything but
a healthy market going forward.
Pressuring prices upwards and maintaining buoyancy in the market, the
strong buyer demand in Montreal led the city to experience a stronger than
expected second quarter. With inventory levels slightly elevated from this
period last year, the market shifted to more balanced conditions from the
seller's conditions, which typified the market over the past few years.
Westmount remains a popular neighbourhood among young professionals and baby
boomers who are drawn to the cache of the established area. Due to various
sound fundamental underpinnings, Montreal is poised to enjoy a healthy housing
market through to year's end. High consumer confidence, robust demand and a
healthy economy will continue to help fuel demand and keep the market moving
at a strong pace.
Toronto's resale housing market experienced a strong second quarter,
characterized by record-breaking activity and rising average house prices.
Toronto's better than expected second quarter was defined by intense demand
that was only barely met by inventory levels. Multiple offer situations
occurred frequently on detached homes, resulting in decreased average listing
periods from this time last year. Looking ahead to the end of the year, the
housing market is expected to continue to enjoy strong, yet slightly slower
activity, accompanied by modest rates of price appreciation.
Ottawa maintained the title of Canada's most stable housing market due to
unwavering demand being met by a comparable level of inventory, resulting in
moderate average house appreciations. All purchaser groups were very active
during the second quarter, with many first-time homebuyers taking advantage of
relatively modest interest rates. Ottawa's housing market is poised to perform
as it has been throughout the second quarter: strong and steady, with average
house prices rising moderately, while the market remains balanced.
Winnipeg's housing market sizzled through the second quarter, and will
continue to do so for the remainder of the year. The recent Manitoba election
prompted increased government spending, particularly on infrastructure, which
has led to the creation of a strong job market and the rejuvenation of several
neighbourhoods, attracting an increase in buyers. The condominium market
remains a bright spot in Winnipeg as many first-time buyers and baby boomers
flock to the maintenance-free lifestyle this housing type offers. Despite new
condominiums coming on stream in 2007, fierce demand will hold a tight grip on
inventory levels.
Regina experienced a booming housing market, supported by the city's
extraordinary job market and diversified economy. Recent proactive media
campaigns in the western provinces promoting Regina as a great place to live
attracted many buyers to the city. New to Regina's housing landscape is the
rapid growth in the condominium market, which have become the favoured choice
of first-time buyers entering the market.
With the same fundamental conditions in tact as in Regina, market
activity in Saskatoon was frenetic during the second quarter; with even more
significant price appreciations recorded. Very limited supply, coupled with
fierce demand, drove prices up in all housing categories, with huge
appreciations in the condominium sector. The brisk activity and rising prices
have also had a ripple effect into neighbouring areas. The typically slower
market in Swift Currant has been invigorated by a spill over of buyers from
Saskatoon. Despite the rapid spike in average house prices, market activity
began to stabilize at the end of the second quarter and is expected to
continue at a slightly more temperate pace, yet still very strong, for the
remainder of the year.
In Calgary, sellers cashing in on home equity gains caused housing
inventory to rise, which led to more moderate price appreciations compared to
the steep appreciations and frenzied activity that occurred last year.
Multiple offer situations still occurred during the second quarter, but with
less frequency than in the past few months. Listing periods increased slightly
over last year with houses remaining on the market 35 per cent longer. While
Calgary's market is expected to remain strong and healthy throughout 2007, the
city is not expecting to experience the conditions that characterized the
market for much of 2006.
Edmonton's housing market enjoyed a robust second quarter with
significant double-digit price appreciations. For the majority of the second
quarter Edmonton experienced strong demand that outpaced supply, resulting in
an abundance of multiple offer situations. The condominium sector experienced
tremendous gains during the second quarter as a number of new projects came on
stream pressuring prices upwards; most notably, in Riverbend/Terwilliger the
price of a standard condominium reported average house price increases of
100 per cent. While house prices are forecast to stabilize during the next two
quarters, the housing market is poised to remain healthy and strong for the
remainder of the year.
Vancouver experienced a traditionally strong spring market achieving
record sales due to a steady increase in demand. The condominium sector
experienced busy activity during the second quarter as buyers increasingly
favoured the low-maintenance lifestyle that condominiums offer; however,
supply could not satisfy demand. Construction of new condominium projects is
limited as the city is approaching a build out, and reaching full building
capacity within the downtown peninsula, placing a cap on future inventory.
Strong consumer confidence, buoyed by economic prosperity in Vancouver is
expected to stimulate strong housing market activity for the remainder of the
year.
Victoria's housing market experienced a rise in average house prices
during the second quarter, due to the combination of a hot job market, high
consumer confidence and low inflation. Steady buyer demand was evident in all
housing types; however, condominiums received the most notable attention.
Although there has been an increase in inventory in the second quarter,
multiple offer situations continue to characterize Victoria's market, with
listing periods lasting an average of 30 days.Survey of Canadian House Prices Second Quarter 2007
Average House Prices
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Standard Detached Bungalow Standard 2-Storey
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Q2 2007 Q2 2006 Bungalow Q2 2007 Q2 2006 2 Storey
Market Average Average % Change Average Average % Change
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Halifax 197,667 182,000 8.6% 227,000 198,333 14.5%
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Charlottetown 147,000 145,000 1.4% 180,000 175,000 2.9%
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Moncton 142,000 133,000 6.8% 142,000 133,000 6.8%
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Fredericton 155,000 155,000 0.0% 190,000 193,000 -1.6%
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St. John's 147,000 143,667 2.3% 206,667 206,000 0.3%
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Atlantic 157,733 151,733 4.0% 189,133 181,067 4.5%
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Montreal 223,864 211,160 6.0% 333,652 319,134 4.5%
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Ottawa 303,083 285,917 6.0% 299,667 281,833 6.3%
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Toronto 398,647 376,223 6.0% 517,659 474,766 9.0%
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Winnipeg 207,750 185,700 11.9% 227,613 201,625 12.9%
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Regina 204,000 143,250 42.4% 181,917 152,925 19.0%
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Saskatoon 281,250 180,250 56.0% 305,000 196,500 55.2%
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Calgary 459,889 371,200 23.9% 465,678 397,867 17.0%
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Edmonton 374,143 253,857 47.4% 397,857 281,286 41.4%
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Vancouver 787,750 708,000 11.3% 875,750 792,375 10.5%
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Victoria 382,000 368,000 3.8% 414,000 402,000 3.0%
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National 338,738 293,618 15.4% 399,469 352,776 13.2%
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Standard Condominium
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Q2 2007 Q2 2006 Condo %
Market Average Average Change
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Halifax 145,000 138,500 4.7%
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Charlottetown 100,000 98,000 2.0%
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Moncton - -
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Fredericton 130,000 125,000 4.0%
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St. John's 153,333 149,333 2.7%
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Atlantic 105,667 102,167 3.4%
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Montreal 201,694 191,308 5.4%
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Ottawa 191,667 178,167 7.6%
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Toronto 274,262 256,178 7.1%
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Winnipeg 117,260 107,065 9.5%
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Regina 118,300 94,500 25.2%
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Saskatoon 205,000 111,000 84.7%
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Calgary 300,078 235,567 27.4%
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Edmonton 263,333 175,833 49.8%
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Vancouver 419,250 369,000 13.6%
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Victoria 260,000 229,000 13.5%
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National 238,784 207,431 15.1%
-------------------------------------------The Royal LePage Survey of Canadian House Prices 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 80 communities
across the country. A complete database of past and present surveys is
available on the Royal LePage Web site at www.royallepage.ca, and current
figures will be updated following the end of the second quarter. A printable
version of the second quarter 2007 survey will be available online on
August 15, 2007.
Housing values in the Royal LePage 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. Historical data is
available for some areas back to the early 1970s.
About Royal LePage
Royal LePage is Canada's leading provider of franchise services to
residential real estate brokerages, with a network of over 12,600 agents and
sales representatives in 600 locations across Canada operating under the Royal
LePage, Johnston and Daniel, and Realty World brand names. Royal LePage
manages the Royal LePage Franchise Services Fund, a TSX listed income trust,
trading under the symbol "RSF.UN". For more Information visit
www.royallepage.ca.
For further information: For the regional market highlights or to
contact a spokesperson, please contact: Tiffany Fisher, Mansfield
Communications Inc., Phone: (416) 599-0024 or E-mail: tiffany@mcipr.com
