Foreign investment slowed in fourth quarter but continues to add to
demand for Vancouver homes; average prices expected to climb a more
modest 2.3 per cent in 2012
VANCOUVER, Jan. 12, 2012 /CNW/ - The Royal LePage House Price Survey and
Market Survey Forecast released today showed strong year-over-year
price appreciation for all housing types surveyed in Vancouver.
Detached bungalows posted the largest year-over-year price increases,
rising 14.1 per cent to $1,017,500. Standard two-storey homes rose 10.9
per cent year-over-year to $1,117,250, while standard condominiums
climbed 10.7 per cent year-over-year to $536,500.
"Investment from Asia continued to add to demand for real estate in
Canada's most expensive market," said Bill Binnie, broker and owner of
Royal LePage North Shore. "Though investment from Asia slowed slightly
in the fourth quarter, these buyers continued to view Canadian real
estate as a safe place to park their money."
In addition to foreign investment, Binnie noted that low interest rates
drove demand for Vancouver homes as many buyers took advantage of low
rates to enter the market or move-up to larger homes.
According to Binnie, inventory levels were in line with the fourth
quarter of last year but unit sales, particularly for detached homes,
were up over the same period.
Looking ahead to 2012, price appreciation in the Vancouver market is
expected to slow with average prices predicted to finish the year 2.3
per cent higher than the end of 2011.
"The state of the global economy will be a major factor in determining
how the Vancouver real estate market fares in 2012," said Binnie. "From
interest rates to foreign investment, the international economic
situation will go a long way in determining demand for Vancouver
"While we anticipate some slowing of the market this year, we believe
calls for a price correction - particularly in the condo market - are
unfounded," he added. "We expect continued foreign investment and
continued low rates to sustain demand for all housing types in 2012."
Nationally, despite calls in some quarters for Canadian house prices to
soften in 2011, the market proved resilient as demand created by low
interest rates and a relatively stable national economy created upward
pricing pressure for all housing types surveyed. Further, recent high
profile reports forecasting significant house price declines in 2012
are not supportable. In the fourth quarter, standard two-storey homes
rose 4.2 per cent year-over-year to $375,427, while detached bungalows
increased 6.1 per cent to $344,392. Average prices for standard
condominiums increased 3.6 per cent to $234,680.
"In the recovery period following the 2008-2009 recession, I found
myself repeatedly speaking of 'irrational exuberance' in the Canadian
housing market," said Phil Soper, president and chief executive of
Royal LePage Real Estate Services. "Expectations were too high and the
pace of expansion unsustainable. With this report, I find myself in
exactly the opposite position. Widespread calls for a major real estate
correction in 2012 simply can't be justified. The industry has
significant momentum entering the year, and is buoyed by the
stimulative effect of very low interest rates; we expect the market to
continue to expand - albeit at a slower pace."
Royal LePage expects average price growth to continue through 2012 and
predicts national average prices to increase by 2.8 per cent by the end
of the year.
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 90
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 fourth quarter 2011. A printable version of the fourth
quarter 2011 survey will be available online on February 10th, 2011.
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
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
14,000 real estate professionals in over 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 & 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:
Director, Global Communications & Public Relations
Royal LePage Real Estate Services