Average price forecast to increase modestly in 2012 as Toronto moves to
a more balanced market
TORONTO, Jan. 12, 2012 /CNW/ - The Royal LePage House Price Survey and
Market Survey Forecast released today showed strong year-over-year
price gains for most housing types surveyed in Toronto due to a lack of
inventory and continued strong demand supported by low interest rates.
Detached bungalows witnessed the largest year-over-year price increase
at 7.2 per cent to $532,137. Prices for standard two-storey homes rose
4.2 per cent year-over-year to $629,188, while standard condominiums
saw an increase of 3.4 per cent to $347,659.
"Inventory has been a challenge for Toronto's potential buyers
throughout 2011 and this restricted supply has put upward pressure on
prices," said Gino Romanese, senior vice president, Royal LePage Real
Estate Services Ltd. "Standard condominiums in the resale market saw a
more modest increase due to a healthier supply that was created by
newer units coming online. However, demand for older units has
increased as they are generally larger in size and preferable to
downsizers who are used to more space."
In 2012, Royal LePage expects that real estate values in Toronto will
increase 2.6 per cent compared to 2011. Romanese noted that for years,
real estate values in Toronto have made substantial gains fueled by
sustained low interest rates and strong immigration, which has had an
impact on affordability.
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:
Sarah Louise Gardiner
Director, Global Communications & Public Relations
Royal LePage Real Estate Services