Third quarter results show Canadian house prices appreciating at close to the long-term annual norm of five per cent per year

TORONTO, Oct. 19 /CNW/ - Canada's residential real estate market saw year-over-year growth in the third quarter as fears of a double dip recession or a housing bubble faded. According to the Royal LePage House Price Survey released today, house price appreciation slowed to a more modest five per cent in the quarter, which is historically typical of balanced real estate markets.

"Most Canadian housing markets cooled in the third quarter. In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year. Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009."

In the third quarter, the average price of a detached bungalow in Canada was up 4.6 percent to $324,531, compared to a year ago. Over the same period, standard two-storey homes rose 4.4 percent to $360,329 while standard condominiums rose 3.9 percent to $226,481.

"House price growth now sits just below the long term annual average of approximately five per cent, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased," said Soper.

St. John's, Winnipeg, Montreal and Vancouver posted house price increases above the national average. Average house prices in St. John's saw year-over-year increases from 12.3 per cent to 14 per cent depending on housing type. Similarly, Winnipeg saw increases between 8 per cent and 11.7 per cent on average year-over-year. Real estate growth in both cities was fueled by an influx in population. St. John's has been an attractive market because of its booming oil industry and Manitoba recently experienced its highest inflow of international immigrants in nearly 40 years according to Statistics Canada. 

"During the period which stretched from 2007 through early 2010, the Canadian housing market was characterized by often wild swings in housing activity. We believe much of that volatility has been worked out of the system and that gradual economic improvement, particularly with our employment picture, offset by the dampening effect of a gradual increase in mortgage costs, should bring a steadier housing industry through 2011," said Soper.

"While the quantity of home sales transactions fluctuated significantly period to period over the past two years, as the real estate industry absorbed the impact and uncertainty of the recession, Canadian house prices saw much less change. In sharp contrast to the U.S. situation, in which a mountain of foreclosures flooded the supply side of the market during the most volatile times, Canadians were reluctant to list their homes. With a limited supply of listings, house prices maintained their value and Canadians, their equity," added Soper.

Regional House Price Data

Royal LePage's latest quarterly House Price Survey shows the strongest growth in year-over-year increases in St. John's, Newfoundland, where detached bungalows were up 14 per cent over 2009, to $228,025, standard two-storey houses rose 13.7 per cent to $313,775 and standard condominiums increased 12.3 per cent to $241,850.

Both Toronto and Ottawa saw modest increases across all three housing types surveyed with standard condominiums posting the largest increases in both cities. In Ottawa, prices for standard condominiums rose 7.1 per cent to $227,667. Standard condominiums in Toronto were up 5.9 per cent to $329,138.

A reduction in new listings and limited inventory, drove average Montreal house price up between 8.0 and 9.1 per cent year-over-year. The average price of a standard two-storey home rose to $364,583.

Interest rates continue to draw buyers in Vancouver where year-over-year prices increased between 8.0 and 10.2 per cent. Standard two-storey Vancouver homes rose to an average price of $977,250. Inventory levels in Victoria are at their highest since 1998, stabilizing the real estate market and offering buyers considerable choice. Bungalows in Victoria rose 5.4 per cent year-over-year to $490,000 while standard condominiums showed no growth compared to this time last year.   

Immigration drove Winnipeg's year-over-year average prices up between 8.0 and 11.7 per cent. The average price of a standard condominium showed the largest increase rising to $163,857

Housing markets in Alberta stabilized in the third quarter as inventory rose and year-over-year prices flattened. Detached bungalows in Calgary rose 2.7 per cent while standard condominiums and two-storey homes decreased by 1 and 1.1 per cent, respectively. In Edmonton, standard two-storey homes were up 3.4 per cent to $338,571, while standard condominiums were down 3.6 per cent year-over-year to $204,167.   

Regina posted a strong performance in year-over-year house prices with the exception of standard condominiums, which experienced downward pressure due to condominium developments. Standard two-storey houses in Regina saw the strongest growth increasing on average by 8.9 per cent to $274,000. Buyers in Saskatoon have seen a considerable increase in inventory, offering more choice as prices rose modestly year-over-year between 2.7 and 5.5 per cent.

Excluding St. John's, Newfoundland, house prices in the Atlantic Provinces stabilized showing little to modest growth. Detached bungalows in Moncton, were the only exception posting year-over-year decreases of 4.4 per cent. Halifax saw healthy increases across all three housing types. On average, detached bungalows increased year-over-year by 7.2 per cent and standard two-storey houses increased 5.5 per cent.

  Detached Bungalows Standard Two Storey Standard Condominium  
Market  Q3 2010 Average Last Quarter Avg Q3 2009 Average Bungalow % Change Q3 2010 Average Last Quarter Avg Q3 2009 Average 2 Storey % Change Q3 2010 Average Last Quarter Avg Q3 2009 Average Condo % Change
Halifax  252,333  246,833  235,333 7.2% 292,667   278,267 277,333 5.5% 171,000  169,250 164,000 4.3%
Charlottetown  162,000 162,000 160,000 1.3% 196,000  196,000 190,000 3.2% 125,000  122,000 120,000 4.2%
Moncton  158,000 150,760  165,240 -4.4% 137,900  139,300 137,000 0.7%        
Fredericton 182,000 182,000 180,000 1.1% 205,000  205,000 205,000 0.0% 151,000 151,000 145,000 4.1%
Saint John  210,000 228,000 201,476 4.2%  280,000  299,000 268,000 4.5%  160,000 137,238 158,283 1.1%
St. John's  228,025 228,025 200,000 14.0% 313,775  313,775 276,000 13.7% 241,850 241,850 215,333 12.3%
Montreal 261,656 255,781 239,733 9.1%  364,583   357,833 337,480 8.0%  229,025  225,270 210,222 8.9%
Ottawa  339,750  334,167 326,667 4.0%  345,167  351,667 326,000 5.9%  227,667 233,500 212,667 7.1%
Toronto 473,867  481,833   452,200 4.8%  577,119  588,095  551,548 4.6%  329,138  326,238 310,750 5.9%
Winnipeg   263,125  261,625  240,875 9.2%  287,188  293,875  265,938 8.0%  163,857  164,000  146,686 11.7%
Regina   293,000   291,500  273,000 7.3%  274,000   277,500  251,500 8.9%  184,500   188,000  185,000 -0.3%
Saskatoon   328,750  331,250  311,500 5.5% 350,000   355,500 340,750 2.7% 230,000  236,667  220,000 4.5%
Calgary   412,744  419,978   402,056 2.7% 410,489   422,078  414,556 -1.0% 246,656   251,756  249,500 -1.1%
Edmonton   311,429  318,714  308,571 0.9%  338,571  345,343  327,429 3.4%  204,167  202,167  211,750 -3.6%
Vancouver   873,500  905,000  802,500 8.8% 977,250  995,250 904,750 8.0%  491,000  487,250  445,500 10.2%
Victoria  490,000  520,000  465,000 5.4%  470,000   483,000 449,000 4.7%  275,000   280,000  275,000 0.0%
National  324,531   332,342  310,259 4.6%  360,329  368,843 345,143 4.4%  226,481  227,746  217,979 3.9%

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 80 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at Current figures will be updated following the complete tabulation of the data for the third quarter. A printable version of the third quarter 2010 survey will be available online on November 5th, 2010.

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.  Historical data is available for some areas back to the early 1970s.

About Royal LePage

Royal LePage is Canada's leading provider of franchise services to residential real estate brokerages, with a network of nearly 14,000 real estate professionals in over 600 locations across Canada. Royal LePage is the only Canadian real estate company to have its own charitable foundation; the Shelter Foundation which is dedicated exclusively to funding women's shelters and violence prevention and education programs. Royal LePage is managed by Brookfield Real Estate Services, and is part of a brand family that includes Royal LePage, Real Living, Johnston and Daniel, and La Capitale Real Estate Network. An affiliated company, Brookfield Real Estate Services Fund, is a TSX listed income trust, trading under the symbol "BRE.UN."

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SOURCE Royal LePage Real Estate Services

For further information: For further information:

David Kaiser
Senior Vice President
Fleishman-Hillard Canada

Tammy Gilmer
Director, Public Relations and National Communications
Royal LePage Real Estate Services

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