Supply shortage and strong demand lead to substantial price appreciation
TORONTO, July 14, 2015 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed significant year-over-year growth in prices for all housing types surveyed in Toronto.
The market for single-family homes surged in the second quarter, with average prices for detached bungalows increasing 12.9 per cent year-over-year to $712,622 and standard two-storey homes rising 11.6 per cent to $834,728. Over the same period, average prices for standard condominiums rose 5.0 per cent to $402,901.
"Toronto real estate values continued to rise in the second quarter as the supply of homes for sale remained restricted," said Gino Romanese, Senior Vice President, Royal LePage. "A global trend is that citizens want to live in and around the downtown core, and Toronto is no different. Demand for these properties far outstrips the supply, which is why we have seen such robust price appreciation over the past few years."
"Inventory is very tight right now and this is unlikely to abate in the short-term, as many homebuyers will delay until the Pan Am Games conclude and city traffic and congestion return to normal levels," he added.
According to Romanese the condominium market has been buoyed by this same trend, but supply is not nearly as constrained as it is with single-family homes. "A lot of new condos came on the market late last year expanding supply, but the rate of new builds has definitely slowed," Romanese said.
Looking at the full year, Royal LePage forecasts that prices will rise by 9.6 per cent in the Toronto market, as compared to 2014, with price increases predicted in all housing categories.
"While prices are expected to continue rising throughout the remainder of the year, the double-digit increases we have seen in recent quarters are far from certain. Events from around the world could impact property markets here, either positively or negatively," Romanese concluded.
Nationally, against the backdrop of mixed economic signals at home and abroad, Canada's real estate market remained healthy in the second quarter of 2015, with solid national average price appreciation across housing segments. Furthermore, the combination of high sales volumes and vigorous price appreciation in Canada's largest cities has put the national residential real estate market on track for a record year in terms of total sales. With most Canadian real estate markets across the country advancing modestly, and some rapidly, Royal LePage advises that a further interest rate cut by the Bank of Canada could over-stimulate markets such as greater Toronto and Vancouver.
During the second quarter, the average price of a home in Canada rose between 3.9 per cent and 7.5 per cent year-over-year in the second quarter. The detached bungalow segment had the highest national increase, rising 7.5 per cent year-over-year to $438,938, while standard two-storey homes appreciated 6.8 per cent to $471,002. During the same period, the average price of a condominium rose 3.9 per cent to $268,583. Looking ahead, Royal LePage forecasts that the average price of a home in Canada will increase 6.1 per cent for the full year when compared to 2014.
"The robust national average home price increases that we have seen in the second quarter are heavily influenced by activity levels in Toronto and Vancouver," said Phil Soper, president and chief executive officer, Royal LePage. "Looking to Canada as a whole, 2015 is shaping up to be a record year for housing, despite the cloud of economic uncertainty caused by low oil prices and twitchy global economies."
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 website at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the second quarter of 2015. A printable version of the second quarter 2015 survey will be available online on August 14, 2015. 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.
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 over 16,000 real estate professionals in more than 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 and 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 symbolTSX:BRE.
For more information visit: www.royallepage.ca.
SOURCE Royal LePage Real Estate Services
For further information: Ray McIlroy, Kaiser Lachance Communications, 647-680-8316, [email protected]