- Inventory shortages combined with high demand cited as reason -
ST. JOHN'S, July 7 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed strong price appreciation across all housing types surveyed in St. John's.
"We've seen strong demand for homes in St. John's this year. Everything is selling and selling well," said Glenn Larkin of Royal LePage Professionals 2000 Ltd. "Similar to last quarter we are witnessing multiple offers across all segments, there are a lot of buyers competing for the same property. This is partly attributable to inventory levels being down this year, combined with the anticipation of interest rates going up, creating a lot of demand and driving up prices."
St. John's saw the strongest year-over-year house price appreciation in the country this quarter. The average price of detached bungalows in St. John's increased significantly, up 19.2 per cent over last year to $238,333, while the average price for standard condominiums rose 18.4 per cent to $255,000. The largest year-over-year average price gains in the area were made by standard two-storey homes rising 19.6 per cent to $330,000.
"We have had a very busy winter and spring market, driven by the anticipation of higher interest rates and the changes to the government regulation," said Larkin. Resale activity is up this quarter, seeing movement by first-time-buyers, executive home buyers and move-up buyers.
Nationally, Royal LePage's forecast predicts Canada's residential real estate market will start to slow in the second half of 2010 after two quarters of strong price appreciation and sales activity. While market fundamentals remain strong across most major centres in Canada, sales activity was overly 'front-loaded' in the first half of the year and is expected to cool off for the third and fourth quarters. Prices are also expected to steady in the second half of the year.
"We have seen an unusual pattern of activity in the housing market over the past 12 months, with the market experiencing a surge of activity and price increases that peaked in the fall of 2009 rather than spring. Early 2010 has followed a more typical seasonal pattern with prices and activity peaking in the second quarter," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. "An expected increase in the supply of homes on the market will now bring stabilization in prices and in some cities we will see both prices and unit sales decline towards the end of the year. This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year."
The surge of activity in the first and second quarters of 2010 corresponds to a number of significant regulatory and financial industry changes that affected homebuyers over the same period, including an increase in interest rates in the spring, tightening of mortgage lending rules for first-time homebuyers and investors, and the lead up to the introduction of the HST in British Columbia and Ontario.
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 second quarter. A printable version of the second quarter 2010 survey will be available online on August 6th, 2010.
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 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 is the only Canadian real estate company to have its own charitable foundation; the Shelter Foundation which 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, Real Living, 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