- Large inventory to slow further 2010 price gains -
VICTORIA, July 7 /CNW/ - Average second quarter house prices in Victoria are up compared to the same period last year, according to the Royal LePage House Price Survey and Market Survey Forecast released today. However, a large inventory - particularly for condominiums - is resulting in some downward price adjustments.
"Homes are generally selling below asking price, and significantly so in some condominium cases," says Carol Geurts, Royal LePage Coast Capital Realty. "It appears prices may have reached a plateau for the moment, in that much of the price growth we expected for 2010 has already happened."
Prices are up year-over-year across all housing types surveyed in Victoria. Detached bungalows led the way with an 11.6 per cent year-over-year price increase, selling for an average of $520,000 in the second quarter. Standard two-storey homes sold for an average of $483,000, up 8.3 per cent over last year. The price of a standard condominium dropped to $280,000 since the start of the year, but was up 1.8 per cent over last year's second quarter average.
Unit sales are down due to a large inventory and tighter requirements for mortgage qualifications. "Most of the pent-up demand has dissipated from the market," says Geurts. "There's a lot of product to choose from, allowing buyers time in making their buying decisions. There's also some confusion about the HST, so people are waiting to see what the overall effects of the implementation will be."
Second quarter sales volumes have dropped 20 to 25 per cent over the same period last year. However, well-priced homes in desirable areas are still receiving significant buyer attention.
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