Balanced market emerged as demand offset by fewer sales and healthy
VICTORIA, Jan. 12, 2012 /CNW/ - According to the Royal LePage House
Price Survey and Market Survey Forecast released today, fourth quarter
house prices in Victoria were flat or down slightly compared to the
same period last year.
Detached bungalows and standard condominiums posted slight price
declines, falling 0.8 and 1.1 per cent respectively, with average
prices of 486,000 and 282,000. Standard two-storey homes posted no
year-over-year change with prices remaining at $480,000.
"Low interest rates continued to drive demand in the fourth quarter but
were offset by an eight per cent year-over-year decrease in sales and
healthy inventory levels for all housing types surveyed," said Carol
Geurts, Royal LePage Coast Capital Realty. "This led to the balanced
market conditions we saw as 2011 came to a close."
According to Geurts, first-time home buyers were among the most active
in the fourth quarter as they looked to take advantage of attractive
interest rates. Demand from first-time buyers led to a strong fourth
quarter rally in prices for detached bungalows and standard
condominiums. This resulted in prices that were nearly in line with the
fourth quarter of 2010 after the softening witnessed earlier last year.
Geurts also noted that despite the balance in the market, competitively
priced homes in the city's most attractive neighbourhoods drew
considerable interest from prospective buyers, leading to a number of
multiple offer situations.
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