Increase in Montréal Home Prices Recorded in Second Quarter and Forecast for Prices to Remain Stable for Remainder of 2012

Low mortgage rates, the strength of the job market and consumer confidence in the economy have contributed to the price increase

MONTRÉAL, July 10, 2012 /CNW/ - Royal LePage Real Estate Services' House Price Survey and Market Survey Forecast released today show a gradual increase in prices over the last twelve months for all housing types surveyed. Historically low mortgage rates, new job creation and consumer confidence in the economy and the housing market, have led to price increases in the second quarter. Royal LePage expects the local housing market to be more balanced for the rest of the year and house prices to stabilize due to a gradual increase in inventory over the coming months.

The average price of a detached bungalow rose by 0.5 percent, to $281,161. Standard two-storey homes posted an increase of 1.4 percent, to $384,804  while standard condominiums rose 3.9 percent to $236,528.

"All types of buyers were active in the housing market in the second quarter: first time buyers, repeat buyers and even those looking for a luxury property. This is what explains the gradual increase in prices, despite the fact that inventory is slowly continuing to rise. The market is balanced which benefits both buyers and sellers. There is now less pressure on buyers which means they can take their time to choose the right property. It is also good for sellers, as they are able to sell their property for an attractive price," says Dominic St-Pierre, Director of Royal LePage for the Québec region.

Unit sales have also increased significantly. Sales of detached bungalows rose 11.8 percent, standard two-storey home sales increased by 9.4 percent and, finally, sales of standard condominiums by 4.3 percent. "The significant increase in the number of units sold is explained by various factors, including consumer confidence in the economy; these consumers believe this is a good time to make a significant investment, such as the purchase of a property. Fixed and variable mortgage rates, which remain incredibly low, are also favourable to the housing market. In addition, nearly 75,000 jobs were created in Québec over the last three months, which definitely stimulate the local economy," explains Dominic St-Pierre.

"With regard to inventory, there has been a sharp increase, ranging from 11 percent for single-family homes to 24.5 percent for standard condominiums. Supply is growing much faster than demand due to the large number of new condominiums coming on the market in the past five years. This is why we anticipate a slowdown in price appreciation for the coming months," notes Dominique St-Pierre.

By the end of 2012, average home prices should be 1.3 percent higher than the same period last year. The real estate market will continue to stabilize and moderate until the end of the year. "The second half of 2012 will be quieter. Factors that will influence prices in the second half of 2012 include the global economy and the tighter mortgage regulations recently established by the federal government. The economic situation in the U.S. is on the right track, but the global economy remains a concern due to instability in Europe, particularly in Greece and Spain," specifies Mr. St-Pierre.

"With respect to the number of units sold and the inventory, sales are expected to increase by 4.5 percent in 2012 when compared to the same period in 2011 and inventory should stabilize in the third or fourth quarter of 2012," concludes Mr. St-Pierre.

Royal LePage House Price Survey for the Second Quarter of 2012

Average home prices

Detached bungalow
Market Average
Q2 2012
Average
Last
Quarter
Average
Q2 2011
Difference (%)
Detached
bungalow
Beaconsfield 322,000 307,000 293,000 9.9%
Dorval 292,500 295,000 298,500 -2.0%
Pierrefonds 287,000 295,000 287,500 -0.2%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges n/a n/a n/a n/a
Ville-Marie n/a n/a n/a n/a
Le Plateau Mont-Royal n/a n/a n/a n/a
Rosemont/La Petite Patrie n/a n/a n/a n/a
Laval 273,000 285,000 265,000 3.0%
Brossard 257,500 265,000 255,000 1.0%
Longueuil 246,000 255,000 260,000 -5.4%
Boucherville 290,125 300,000 299,000 -3.0%
Montréal 281,161 286,000 279,714 0.5%

Standard Two-Storey Home
Market Average
Q2 2012
Average
Last
Quarter
Average
Q2 2011
Difference (%)
Two-storey
Home
Beaconsfield n/a n/a n/a n/a
Dorval 316,500 305,000 294,500 7.5%
Pierrefonds 392,000 397,000 372,000 5.4%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges 503,000 495,000 528,000 -4.7%
Ville-Marie n/a n/a n/a n/a
Le Plateau Mont-Royal n/a n/a n/a n/a
Rosemont/La Petite Patrie n/a n/a n/a n/a
Laval 352,250 360,000 338,000 4.2%
Brossard 382,375 385,000 395,000 -3.2%
Longueuil 335,000 365,000 330,000 1.5%
Boucherville 412,500 405,000 399,200 3.3%
Montréal 384,804 387,429 379,529 1.4%

Standard Condominium
Market Average
Q2 2012
Average
Last
Quarter
Average
Q2 2011
Difference (%)
Condominium
Beaconsfield n/a n/a n/a n/a
Dorval n/a n/a n/a n/a
Pierrefonds 203,000 212,000 195,000 4.1%
Westmount n/a n/a n/a n/a
Notre-Dame-de-Grâce/Côte-des-Neiges 250,000 255,000 245,000 2.0%
Ville-Marie 324,500 321,000 305,000 6.4%
Le Plateau Mont-Royal 313,500 323,000 309,000 1.5%
Rosemont/La Petite Patrie 268,500 259,000 247,750 8.4%
Laval 196,500 192,000 185,750 5.8%
Brossard 185,750 201,000 192,000 -3.3%
Longueuil 176,000 182,000 175,000 0.6%
Boucherville 211,000 206,000 195,000 8.2%
Montréal    236,528 239,000     227,722 3.9%

The Royal LePage House Price Survey is the largest, most comprehensive real estate analysis of its kind in the country. It provides information on seven types of housing in over 250 neighbourhoods from coast to coast. This release refers to an abridged version of the Survey, which highlights the evolution of prices of the three most common housing types in 80 communities across the country. You can view a complete database containing the data collected in surveys by visiting the Royal LePage website at www.royallepage.ca. Current data will be updated at the end of the second quarter. A printable version of the 2012 second quarter report will be available online on August 9, 2012.

The property values listed in Royal LePage's House Price Survey corresponds to Royal LePage's assessment of the market value of properties in each location, which is based on local data and market information provided by Royal LePage's experts in the residential real estate sector. For some regions, it is possible to access historical data dating back to the early 1970s.

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 more than 14,000 sales representatives in 600 offices across Canada. 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 and children's shelters, as well as educational programs aimed at ending domestic violence. Royal LePage is an affiliate of Brookfield Real Estate Services Inc., a company listed on the Toronto Stock Exchange under the symbol "TSX: BRE"

For more information, visit www.royallepage.ca or www.brookfieldres.com.

SOURCE Royal LePage Real Estate Services

For further information:

Stéphanie Panneton
Fleishman Hillard Inc.
514-866-6776, ext. 320
stephanie.panneton@fleishman.ca

Tammy Gilmer
Director, Global Communications and Public Relations
Royal LePage Real Estate Services
416-510-5783


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