House prices in Montreal increase slightly in the second quarter, setting the stage for a sustained recovery in the second half of 2013

Continued favourable interest rates for buyers and relative consumer confidence in the economy have contributed to the increase in property prices

MONTREAL, July 9, 2013 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today show an increase in prices in the second quarter for all housing types surveyed in the Montreal area. However, the number of units sold continues to decrease, as predicted by Royal LePage. By the end of 2013, Royal LePage expects the local real estate market to experience a slight increase in house prices along with a sustained recovery in the number of sales, which would match sales levels seen in 2012.

In the second quarter, the average price of a detached bungalow rose by 2.7 per cent, to reach $288,868. The average price of a standard two-storey home rose 3.3 per cent to $397,643 and the price of a standard condominium rose 1.6 per cent to $240,306.

"We were surprised to see that the decrease in sales price anticipated at the start of the year for the second quarter did not materialize.  It is possible the decrease was delayed by one quarter, although we hope to see a recovery of the market along with a slight increase in prices due to a resilient market and economic conditions favourable to buyers," notes Dominic St-Pierre, Director of Royal LePage Real Estate Services for the Quebec Region.

However, unit sales decreased for all housing types in the Montreal region during the second quarter. Sales of detached bungalows decreased by 16 per cent, standard two-storey homes decreased by 11 per cent and standard condominiums decreased by 14 per cent. "This decrease is in line with our forecast, considering that the same period last year was very strong in terms of unit sales. Nevertheless, it is encouraging to see that the decrease is not as great as it was in the first quarter. Therefore, we expect an increase in the number of unit sales in the next quarter," explains Dominic St-Pierre.

As for types of buyers, all were active in the housing market in the second quarter: first-time buyers, repeat buyers and even those looking for a luxury property, which is an encouraging sign for the local market. "Unlike the second half of 2012, where first-time buyers were absent, we are currently seeing a lot of activity from this group, as is traditionally the case," adds Dominic St-Pierre.

Inventory remained high for the Montreal region in the second quarter. "The number of properties for sale has drastically increased, mainly on the Montreal Island for all housing types surveyed. We are witnessing a 25 per cent increase or higher, both for single-family dwellings and for condominiums," Dominic St-Pierre points out. "Supply is growing much faster than demand for condominiums due to the large number of new units being built and coming on the market in the last few years."

Given the large inventory during the second quarter, buyers are much more patient and are waiting for just the right property, at the right price. "Market conditions are very favourable for buyers, since all elements seem to work in their favour - a rare occurrence. This reminds us how important it is for sellers to deal with a broker who has experience in determining the right price in a market offering buyers many possibilities," says Dominic St-Pierre.

"We continue to expect a slight increase in property prices in 2013, but not as significant as indicated in our forecast at the beginning of the year. Royal LePage expects, instead, an increase of about one to two per cent in the Montreal region this year, coupled with a decrease of five per cent in units sold compared to last year," states Dominic St-Pierre. "As for inventory, we continue to anticipate an increase over 2012. However, the second half increase in 2013 will be less sharp than what we see at the moment."

By the end of 2013, prices will mainly be influenced by the world economy. "We already know that interest rates will remain low, which is good news for the real estate market in 2013.  Consumer confidence will be important, and will be strongly influenced by external factors. The economic situation in the United States, which continues to improve, and the recovery in the U.S. real estate sector are extremely positive signs; however, the situation in Europe continues to be worrisome," concludes Dominic St-Pierre.

Canadian House Price Survey for the Second Quarter of 2013
Average house prices

Detached bungalow
Market Average

Q2 2013
Average
Last
Quarter
Average
Q2 2012
Difference (%)
Detached
bungalow
Beaconsfield 330,350 331,000 322,000 2.6%
Dorval 300,500 301,000 292,500 2.7%
Pierrefonds 289,225 289,450 287,000 0.8%
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 238,750 279,500 273,000 3.9%
Brossard 268,500 258,500 257,500 4.3%
Longueuil 245,750 245,500 246,000 -0.1%
Boucherville 304,000 310,000 290,125 4.8%

Montréal

288,868 287,850 281,161 2.7%

Standard Two-Storey Home
Market Average

Q2 2013
Average
Last
Quarter
Average
Q2 2012
Difference (%)
Two-storey
Home
Beaconsfield n/a n/a n/a n/a
Dorval 334,000 326,000 316,500 5.5%
Pierrefonds 389,500 386,000 392,000 -0.6%
Westmount n/a n/a n/a n/a
Notre-Dame-de-
Grâce/Côte-des-Neiges
524,000 524,000 503,000 4.2%
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 365,000 364,000 352,250 3.6%
Brossard 399,000 389,500 382,375 4.3%
Longueuil 344,000 334,500 335,000 2.7%
Boucherville 428,000 426,500 412,500 3.8%
Montréal 397,643 392,929 384,804 3.3%

Standard Condominium
Market Average

Q2 2013
Average
Last
Quarter
Average
Q2 2012
Difference (%)
Condominium
Beaconsfield n/a n/a n/a n/a
Dorval n/a n/a n/a n/a
Pierrefonds 208,000 209,000 203,000 2.5%
Westmount n/a n/a n/a n/a
Notre-Dame-de-
Grâce/Côte-des-Neiges
259,000 252,000 250,000 3.6%
Ville-Marie 315,000 325,000 324,500 -2.9%
Le Plateau Mont-Royal 329,000 323,000 313,500 4.9%
Rosemont/La Petite
Patrie
271,500 270,000 268,500 1.1%
Laval 198,750 198,900 196,500 1.1%
Brossard 195,000 195,000 187,750 5.0%
Longueuil 174,250 175,000 176,000 -1.0%
Boucherville 212,500 212,500 211,000 0.6%
Montréal 240,306 240,044 236,528 1.6%

About the Royal LePage House Price Survey

The House Price Survey by Royal LePage 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 cities and 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 90 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 by the end of the first quarter of 2013. A printable version of the 2013 second quarter report will be available online on August, 6, 2013.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country's leading provider of services to Real Estate Brokers, with a network of more than 14,500 Brokers 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.

 

SOURCE: Royal LePage Real Estate Services

For further information:

Sébastien Bonneau
Kaiser Lachance Communications
(514) 926.7120
sebastien.bonneau@kaiserlachance.com

Tammy Gilmer
Director, Global Communications and Public Relations
Royal LePage Real Estate Services
(416) 510.5783
tgilmer@royallepage.ca


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