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
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
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.
For more information, visit www.royallepage.ca.
SOURCE Royal LePage Real Estate Services
For further information:
Director, Global Communications & Public Relations
Royal LePage Real Estate Services