- Above average inventory will push prices down by year end -
VANCOUVER, July 7 /CNW/ - Following a strong spring housing market, the Royal LePage House Price Survey and Market Survey Forecast released today showed large year-over-year price increases for all housing types surveyed in Vancouver. Above average inventory levels, however, are expected to temper record April prices and push current Vancouver house prices down slightly by the end of 2010. Despite this, average prices are forecast to remain 9.7 per cent higher than their end of 2009 levels.
Though inventory was up 30 per cent over the same period last year, the implementation of HST and rising interest rates helped push buyers into the second quarter market. "Buyers have more to choose from, and typically can get what they want," said Bill Binnie, broker and owner of Royal LePage North Shore. "A large inventory gives buyers bargaining power."
Detached bungalows in Vancouver sold for an average of $905,000 in the second quarter, up 19.1 per cent from the same period last year. Prices of standard two-storey homes in Vancouver rose 17.6 per cent year-over-year, selling at $995,250. Standard condominiums in Vancouver increased 16.6 per cent year-over-year to $487,250.
"Inventory is increasing, and that's what drives prices," said Chris Simmons, broker and owner of Royal LePage Westside in Vancouver. "The number of available listings is the most important statistic out there. It's all about supply and demand."
Despite a typically busy spring market, homes generally sold below asking price in the second quarter - with the exception of single family properties on the Westside.
This mirrors Royal LePage's national forecast, which 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: Jeremy Twigg, Fleishman-Hillard Canada, 604-688-2505; Tammy Gilmer, Director, Public Relations and National Communications, Royal LePage Real Estate Services, 416-510-5783