Canada's housing market begins the year with slightly positive price trends

Unprecedented combination of low interest rates, flattening house prices and strengthening economy provide support to Canada's housing market

TORONTO, April 4, 2013 /CNW/ - The Royal LePage House Price Survey released today showed that house prices remained relatively flat in the first quarter of 2013 compared to the first quarter of 2012, recording that the average price of a home in Canada increased between 1.2 per cent and 2.4 per cent. An unprecedented combination of flat or in some regions decreasing house prices, inexpensive mortgages and the confidence brought on by an improving economy has resulted in a unique residential real estate environment.

In the first quarter of 2013, the national average price of a standard two-storey home increased 2.2 per cent, compared to the previous year. Over the same period, the national average price of a detached bungalow increased 2.4 per cent and the average price of a standard condominium increased 1.2 per cent.

"2013 finds the Canadian housing industry in a highly unusual place. The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we've seen before," said Phil Soper, president and chief executive of Royal LePage. "Typically one of these variables is moving hard in an opposite direction. While some have spoken loudly about impending market volatility and dramatic downward pressure on home prices, we are simply not seeing evidence of this. The current environment is very supportive for housing. Those waiting for big declines in home prices will likely be disappointed."

The Canadian economy stabilized during the first quarter of 2013 and the country surpassed expectations with the addition of 51,000 jobs¹ during the month of February. Domestic economic strength is buttressed by an improving U.S. economy and the expectations of a growth in resource consumption driven by China. At the same time, despite the improving economy, the Bank of Canada has been clear about its intention to keep interest rates low for the near- and mid-term.

"There is some degree of uncertainty regarding the of length time these factors will remain in place," said Soper. "Of the three variables we identified, economic strength is the most likely to persist based upon the upswing in employment, our well-educated workforce, a solid financial sector and the influence of our natural resource sector. Given recent and repeated signals from the Bank of Canada, we can expect interest rates to remain low for some time to come. The continued stability of house prices is much harder to gauge."

"Timing house prices to trends in a given neighbourhood is very difficult," said Soper. "And it is important to remember that Canada is a collection of regional markets. Case in point, we see renewed strength in the Alberta and Saskatchewan markets in early 2013, based on the health of the energy sector. Across the mountains in Vancouver, affordability concerns dampened demand significantly. The resultant correction in home prices there may attract a new round of buyers before year end."

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¹ Source: Statistics Canada, Labour Force Survey, February 2013. < http://www.statcan.gc.ca/daily-quotidien/130308/dq130308a-eng.htm >.

Regional Market Summaries

In the first quarter of 2013, Halifax continued to experience consistent growth, with significant prices increases across housing types surveyed. Detached bungalows made the highest leap, increasing 7.8 per cent year-over-year to $294,667.  St. John's witnessed some of the highest average price gains in Canada, with two-storey homes rising 10.6 per cent. This was due in large part to an upswing in activity by move-up and executive buyers purchasing higher priced homes.

Montreal home prices remained relatively flat in the first quarter 2013. Standard two-storey homes saw the largest increase of 1.4 per cent to an average price of $392,929, while standard condominiums experienced the smallest rise of 0.4 per cent to $240,044.

Ottawa's real estate market remained relatively flat, with house price gains ranging from 0.8 to 1.9 per cent. While standard condominiums saw the largest price gains, unit inventory for this housing category shot up 41 per cent compared to last year.

Toronto posted moderate growth in the first quarter, with average price gains of 1.8 to 4.0 per cent for housing types surveyed. The quarter saw a slight decrease in volume, even among first-time home buyers, who are traditionally the most active group. At the same time, multiple offer situations and bidding wars were still taking place in some areas of the city.

The 2013 real estate market was off to a strong start in Winnipeg.  Detached bungalows posted the largest increase of 6.9 per cent to $302,896. Multiple offer and bidding war situations remain prevalent, with 35 per cent of listings selling above asking price.

With inventory yet to catch up to an influx of first-time buyers moving to the city, Regina continued to see strong price increases.  Standard two-storey homes saw the highest increase, rising 12.7 per cent year-over-year to an average price of $337,000.

Low inventory also put upward pressure on prices in Calgary, with increases of 5.1 to 6.8 per cent for housing types surveyed. Although they experienced the smallest price increase, standard condominiums were the most active housing category in the first quarter of 2013. In contrast, Edmonton prices remained relatively flat with price changes ranging from a decrease of 0.2 per cent to an increase of 1.7 per cent across surveyed housing types.

Vancouver posted year-over-year decreases of 5.1 to 5.6 per cent across housing types. The market witnessed an overall reduction in activity from both buyers and sellers, which continued to drive prices down.

Royal LePage's quarterly House Price Survey shows the annual change of prices for key housing segments in select national markets.

	Detached Bungalows				Standard Two-Storey				Standard Condominium
Market	Q1 2013 Average	Last Quarter Average	Q1 2012 Average	Bungalow % Change	Q1 2013 Average	Last Quarter Average	Q1 2012 Average	2 Storey % Change	Q1 2013 Average	Last Quarter Average	Q1 2012 Average	Condo % Change
Halifax	294,667	292,833	273,333	7.8%	319,833	314,500	306,667	4.3%	215,950	208,500	201,000	7.4%
Charlottetown	173,000	172,000	170,000	1.8%	205,000	205,000	200,000	2.5%	128,000	127,000	125,000	2.4%
Moncton	158,000	156,000	145,700	8.4%	137,200	137,800	134,800	1.8%
Fredericton	207,000	205,000	205,000	1.0%	220,000	220,000	208,000	5.8%	158,000	158,000	157,000	0.6%
Saint John	176,000	176,357	191,000	-7.9%	275,000	305,230	293,250	-6.2%	153,000	188,656	161,500	-5.3%
St. John's	290,000	271,667	262,500	10.5%	387,667	367,333	350,500	10.6%	300,000	289,333	274,000	9.5%
Montreal	287,850	282,911	286,000	0.6%	392,929	379,546	387,429	1.4%	240,044	240,272	239,000	0.4%
Ottawa	388,583	386,000	385,667	0.8%	391,250	389,167	387,833	0.9%	262,500	263,667	257,667	1.9%
Toronto	565,700	558,345	544,450	3.9%	671,252	668,133	645,467	4.0%	359,671	356,865	353,355	1.8%
Winnipeg	302,896	304,157	283,375	6.9%	319,409	320,226	309,250	3.3%	194,269	192,062	186,143	4.4%
Regina	329,250	333,330	316,500	4.0%	337,000	382,500	299,000	12.7%	208,500	210,750	199,000	4.8%
Saskatoon	352,500	363,750	338,750	4.1%	384,000	376,750	372,250	3.2%	261,333	261,333	237,000	10.3%
Calgary	451,833	440,600	442,989	6.8%	439,800	434,667	418,233	5.2%	260,767	250,078	248,111	5.1%
Edmonton	329,679	331,429	324,143	1.7%	357,109	356,286	354,714	0.7%	202,838	202,714	203,143	-0.2%
Vancouver	1,013,750	1,001,250	1,068,500	-5.1%	1,116,250	1,102,500	1,182,250	-5.6%	481,250	481,250	510,000	-5.6%
Victoria	452,140	470,000	470,000	-3.8%	452,115	475,000	459,000	-1.5%	267,000	258,000	287,000	-7.0%
National	364,857	356,790	356,306	2.4%	407,044	390,444	398,282	2.2%	246,071	239,374	243,153	1.2%

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 first quarter of 2013. A printable version of the first quarter 2013 survey will be available online on May 3, 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 14,000 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 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

Gwen McGuire
Kaiser Lachance Communications
416-725-2520
[email protected]

Tammy Gilmer
Director, Global Communications & Public Relations
Royal LePage Real Estate Services
416-510-5783