Canada's House prices forecast to rise by 3.5 per cent in 2008; activity to moderate

    - Solid economic fundamentals should allow Canada's residential real
    estate market to chart its own course and maintain its buoyancy
    throughout 2008 -

    TORONTO, Dec. 17 /CNW/ - After experiencing an exceptional year
characterized by strong average house price appreciation and record breaking
unit sales, the momentum from 2007 is anticipated to carry over and position
Canada's real estate market for steady, yet moderate growth in 2008, according
to the Royal LePage 2008 Market Survey Forecast released today.
    Nationally, average house prices are forecast to rise by 3.5 per cent to
$317,288 in 2008, while transactions are projected to fall slightly from this
year's record high unit sales to 500,927 (-4.0 %) unit sales in 2008. Despite
the year-over-year reduction in unit sales, the number of homes trading hands
in 2008 is expected to remain higher than in all years prior to 2007.
    "Canada's housing market in 2008 should continue to thrive on a balanced
diet of strong economic fundamentals, including high levels of employment,
resilient consumer confidence, modest levels of inflation and the relatively
low cost of borrowing money," said Phil Soper, president and chief executive
of Royal LePage Real Estate Services. "Canada is currently enjoying one of the
longest housing market expansions in history; however, as we move into 2008 it
is anticipated that slowly eroding affordability will cause demand to ease,
allowing the market to move toward balanced conditions, with lower levels of
price appreciation, and fewer homes trading hands."
    With the most affordable major market homes in Canada, residents of
Regina and Winnipeg are forecast to drive the greatest increases in house
prices in 2008, as job opportunities and in-migration continue to soar in each
city. While Calgary and Edmonton will continue to boast healthy economies and
high levels of home sale activity, the excessively fast run-up of home values
in 2006 and the first half of 2007 priced people out of the market, causing
inventory levels to rise late in the year. Alberta home price increases will
be much more moderate in 2008 as the regional market continues to adjust to
the new house value reality.
    With the country's highest home prices, Vancouver's steadfast market will
continue to expand on the back of a strong provincial economy. As the city
readies itself for the 2010 Olympic Games, there will be an abundance of new
jobs created.
    Ontario and Quebec markets are anticipated to maintain their relative
strength and vibrancy throughout next year, weathering stormy financial
markets and adjusting well to the high value of the Canadian dollar. The
services based industries that have become the backbone of the Toronto and
Montreal economies have tolerated the rise of Canada's dollar to parity very
well, despite increasingly price competitive offering from overseas markets.
    In Atlantic Canada, a slight depletion of inventory coupled with high
immigration levels will see the housing market growing at a strong and steady
pace - Halifax is expected to have higher than national average growth in
    The frenzied pace of price inflation that has characterized the real
estate market over the past two years in the resource rich west were
unsustainable and should ease substantially in 2008. In Central Canada, price
increases peaked in late 2005, and have been moderating since.
    From coast-to-coast, the homebuyer demographic is anticipated to swell
with first-time purchasers, as many flock to take advantage of recently
reduced lending rates, longer amortization periods and the resultant
manageable mortgage payments.
    Added Soper: "The year ahead presents opportunities for those people who
have shied away from the frenetic real estate market of the past few years,
with its bidding wars and unconditional offers; while prices should continue
to rise, they are expected to do so at a more reasonable pace. Canada's
economy is strong, and the desire for home ownership remains a vibrant and
attainable goal - real estate remains a solid long term investment."

                         2008 Market Survey Forecast


                              2008      2007
    Market          08/07%  Forecast Projected 2007/2006      2006      2005
    Halifax           6.9%  $233,000  $218,000      7.3%  $203,178  $189,196
    Montreal          3.5%  $238,000  $230,000      6.6%  $215,659  $203,720
    Ottawa            4.2%  $285,000  $273,500      6.2%  $257,481  $248,358
    Toronto           3.5%  $388,500  $375,500      6.6%  $352,388  $336,176
    Winnipeg         11.4%  $190,000  $170,500     12.2%  $151,983  $134,028
    Regina           15.4%  $188,600  $163,500     24.0%  $131,851  $123,600
    Calgary           4.0%  $429,000  $412,500     19.0%  $346,675  $250,832
    Edmonton          1.0%  $341,000  $337,500     34.5%  $250,915  $193,934
    Vancouver         4.0%  $587,500  $565,000     10.8%  $509,876  $425,745
    CANADA            3.5%  $317,228  $306,500     10.7%   276,974   249,201

                           Highlight of 2008 Trends

    Strength of the Canadian Dollar

    The position of the Canadian dollar hovering at parity will continue to
bolster the country's high consumer confidence, and is anticipated to
translate into continued growth in consumer spending. The negative impact of
the high dollar on the country's manufacturing sector for export trade will be
mostly felt in Southern Ontario and Quebec; however, both regions are
demonstrating considerable resiliency, with a concerted effort by both
governments and industry underway to improve productivity and improve
international competitiveness.

    U.S. Economy

    In sharp contrast to the weakening U.S. economy and deteriorating housing
market, Canada's economy and housing market continues to demonstrate staying
power. Canadian mortgage products are markedly different from those offered in
the U.S., and the sub-prime market makes up a significantly smaller portion of
the overall Canadian mortgage market. It is unlikely that the residential real
estate industry in Canada will have to endure the kind of sharp correction
underway south of the border.


    Employment rates across the country are expected to continue at the
current very high levels, driven by the robust energy and general natural
resource sectors specifically, and a very healthy services economy in general.
In the year ahead, job market growth is anticipated to continue, especially in
Regina, Winnipeg and Halifax.

    Interest Rates

    The move by the Bank of Canada to reduce its overnight target-lending
rate by a quarter of a percent in December 2007 will bode well for first-time
buyers planning to enter the market in 2008. The relatively low current
interest rates, and the possibility that rates could fall even lower in
response to moderating inflation and lower rates in the U.S., will continue to
attract new buyers to the housing market.

    About Royal LePage

    Royal LePage is Canada's leading provider of franchise services to
residential real estate brokerages, with a network of over 13,00 agents and
sales representatives in 600 locations across Canada operating under the Royal
LePage, Johnston and Daniel, and Realty World brand names. Brookfield Real
Estate Services Fund, a TSX listed income trust, trading under the symbol
"BRE.UN", manages Royal LePage.

    For more information, visit

For further information:

For further information: For the regional market highlights or to
contact a spokesperson, please contact: Tiffany Fisher, Mansfield
Communications Inc., Phone: (416) 599-0024 or E-mail:

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