- Increases fuelled by low interest rates, shortage of inventory -
ST. JOHN'S, Oct. 8 /CNW/ - The Royal LePage House Price Survey released today showed just how strong the St. John's real estate market is with average prices for condominiums up by 13.3 per cent to $230,000, bungalows increased by 13.1 per cent to $215,000 and standard two-story homes increased by 13.3 per cent to 296,667 when compared to year-over-year.
This quarter, the Mt. Pearl area witnesses the largest price increases as bungalows were up 17.8 per cent, to $235,000 while two-storey homes were up 16 per cent, to $290,000.
First-time buyers and real estate investors continued to drive the market taking advantage of increased affordability due to low interest rates. A lack of inventory at all price points meant that while unit sales were down, prices were up compared to Q2 with many properties attracting multiple offers.
While the St. John's market has eclipsed the highs seen in 2008, Glenn Larkin, Broker/Owner, Royal LePage Atlantic Homestead Ltd., is quick to caution that the city is not entering another aggressive expansionary real estate cycle.
"Where there is a shortage of homes for sale, we are seeing stronger activity," said Mr. Larkin, "Where there is no shortage, we're seeing normal bidding take place without the 'panic buying' we witnessed last year."
In contrast to the national trend, which saw buyers for lower-priced homes drive the market, mid- to high-end buyers in St. John's also returned to the market in Q3 causing some of the city's largest price increases.
Overall Canada's housing market is on the road to recovery, but despite the strength of the market in the third quarter, giving the appearance of a surge in real estate activity, Royal LePage cautioned that sales are actually lagging approximately one month behind the typical seasonal pattern.
"The economic recession interrupted the flow of the real estate cycle but it is essentially back on track," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services. "There is the illusion of a boom in the market, but in fact what we are experiencing is the end of a normal, short-term correction. Once housing supply returns to normal levels, we believe the economy will support low pricing growth into 2010."
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 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. Current figures will be updated following the complete tabulation of the data for the third quarter. A printable version of the third quarter 2009 survey will be available online on November 6th, 2009.
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 nearly 14,000 real estate professionals in over 600 locations across Canada. Royal LePage believes in the importance of giving back to the community and is the only Canadian real estate company to have its own charitable foundation. The Shelter Foundation is dedicated exclusively to funding women's shelters and violence prevention and education programs. Royal LePage is managed by Brookfield Real Estate Services, and is part of a brand family that includes Royal LePage, Johnston and Daniel, and La Capitale Real Estate Network. An affiliated company, Brookfield Real Estate Services Fund, is a TSX listed income trust, trading under the symbol "BRE.UN."
For more information visit www.royallepage.ca.
SOURCE Royal LePage Real Estate Services
For further information: For further information: Jessica Culp, Fleishman-Hillard Canada, (416) 645-3664; Tammy Gilmer, Director, Public Relations and National Communications, Royal LePage Real Estate Services, (416) 510-5783