Demand from Alberta and British Columbia's Lower Mainland places upward pressure on prices
KELOWNA, BC, Jan. 13, 2016 /CNW/ - The Royal LePage House Price Survey1 and Market Survey Forecast2 released today showed strong price increases across housing types surveyed in Kelowna. During the fourth quarter of 2015, the aggregate3 price of a home in this region rose 7.1 per cent year-over-year to $478,310.
The median price of a two-storey home jumped 11 per cent to $605,245 as a result of very tight inventory in this category, while bungalow prices rose 4.8 per cent to $477,143. Condominiums posted more modest gains, appreciating 1.4 per cent year-over-year to $304,463.
"This is the second exceptionally strong year in a row for this market, with an influx of buyers from Alberta and British Columbia's Lower Mainland," said Francis Braam, managing broker and owner, Royal LePage Kelowna.
Last year saw strong economic growth in British Columbia and a number of forecasters expect the province to lead the country in economic growth in 2016. The province's unemployment rate of 6.7 per cent is lower than the national average of 7.1 per cent and the province added more jobs in 2015 than any other region.
Looking ahead, Braam predicts unit sales and home prices in Kelowna will remain stable. "We anticipate that economic conditions and the housing market in this region will be similar to what we experienced in 2015."
Nationally, Canada's residential real estate market showed strong growth in the fourth quarter of 2015, led by hot Vancouver and Toronto markets. Looking forward to 2016, Royal LePage expects continued price increases in most markets, but not at the pace that has been the recent norm. Instead, the national real estate market is expected to slow later this year, principally due to the effects of a dampened economy in Western Canada and eroding affordability in Toronto and Vancouver.
The price of a home in Canada increased 6.5 per cent year-over-year to $500,688 in the fourth quarter. The price of a two-storey home rose 7.7 per cent year-over-year to $610,134, and the price of a bungalow increased 5.4 per cent to $420,082. During the same period, the price of a condominium increased 3.1 per cent to $341,448. Looking ahead to 2016, Royal LePage forecasts that the median price of a home in Canada will increase at 4.1 per cent for the full year when compared to 2015.
"The frenetic pace of our country's largest housing markets should moderate throughout the year ahead," said Phil Soper, president and chief executive officer, Royal LePage. "While most of the country will continue to see house value appreciation in 2016, we expect that the pace of price increases in the Greater Vancouver and the Greater Toronto Areas – where real estate appreciation has significantly outpaced job and wage growth – will settle to a more sustainable, single-digit price increase trajectory."
In 2016, Royal LePage expects the price of residential real estate in Canada to be more heavily influenced by macroeconomic factors than by housing-specific variables such as tighter regulation in the mortgage industry. The Bank of Canada is expected to keep its overnight rate steady through the all-important spring market, extending the prolonged period of exceptionally low borrowing rates. While the new Federal Minister of Finance kicked off his appointment with a hike to 10% in the minimum down payment required for the portion of mortgage insurance over $500,000, Royal LePage expects this change to have a marginal effect on the overall market.
1 Powered by Brookfield RPS
2 The Royal LePage Market Survey Forecast provides projections for aggregate national and regional house prices at 2016 year-end close (fourth quarter 2016 close)
3 Aggregate prices are calculated via a weighted average of the median values of homes for reported property types in the regions surveyed
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, Brookfield RPS, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
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 over 16,000 real estate professionals in more than 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 and 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: Eddie Tabakman, Kaiser Lachance Communications, 647-680-8316, Eddie.Tabakman@kaiserlachance.com