Low inventory and high demand drive price increases across all housing types surveyed
CALGARY, July 9, 2013 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year price increases across all housing types surveyed in Calgary.
Detached bungalows increased by 5.9 per cent to $457,889, and condominiums also saw a healthy increase of 6.0 per cent, to $261,933. Standard two-storey homes realized the greatest gains, increasing by 6.7 per cent to $453,789.
"Inventory is low across all categories right now, and this is driving prices up," said Ted Zaharko, broker and owner of Royal LePage Foothills. "When a listing comes up, there is a swarm of potential buyers, and multiple offers are common. Condominiums are profiting from the spillover effect - buyers who are having difficulty breaking into the tight bungalow market are moving to the condominium market, to the point where inventory is tightening there as well."
When asked about the effects of the recent flooding on the housing market, Zaharko said, "We're saddened by the recent events and wish a quick recovery to all those affected. From a market standpoint, while there may be some irregular activity in the short-term we do not foresee these events having a long-term impact on housing activity or prices in the Calgary area."
Looking ahead, Royal LePage predicts continued significant increases in housing prices over the balance of 2013. "Prices are expected to rise another 6.5 per cent before the end of the year, while unit sales volume is likely to increase by approximately 3.3 per cent," added Zaharko. "Unit sales would be greater if more inventory were available, but until additional inventory comes onto the market, growth in unit sales will be somewhat tempered."
Nationally, in the second quarter, standard two-storey homes and detached bungalows both showed a year-over-year average price increase of 2.7 per cent to $419,614 and $386,547, respectively. Average prices for standard condominiums showed a more modest increase during the same period, rising 1.2 per cent to $248,750. Royal LePage forecasts that house prices will see modest gains throughout the remainder of 2013, projecting a 3.0 per cent increase for the full year when compared to 2012.
Dialogue concerning the direction of Canada's housing market has remained front and centre in recent months. Changes to Canada's mortgage lending rules in mid-2012 coupled with concerns about consumer debt levels, housing affordability in cities like Toronto and Vancouver and continued international economic uncertainty have prompted a number of analysts to forecast large downward price adjustments.
"As we have stated consistently since the current market downturn began late in the second quarter of 2012, this is a normal cyclical correction which brings fewer home sales and softer prices. Those hoping their predictions of a bursting bubble and cataclysmic drops in home values will come true are out of luck again," said Phil Soper, president and chief executive of Royal LePage. "Price appreciation in most markets across the country has been well below the long-term average for Canada and will remain so through to the end of the year. We expect to see the number of homes trading hands to begin to rise slightly on a year-over-year basis in the second half of 2013, with price softness continuing until mid-2014, at which point we'll see an emergence from the current cycle."
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 2013. A printable version of the second quarter 2013 survey will be available online on August 6, 2013. 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 14,500 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 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:
Kaiser Lachance Communications
Director, Global Communications & Public Relations
Royal LePage Real Estate Services