Listing shortages causing bidding wars among buyers
KITCHENER, ON and WATERLOO, ON and CAMBRIDGE, ON, Oct. 13, 2016 /CNW/ - The aggregate1 house price in Kitchener/Waterloo/Cambridge increased in the third quarter of 2016 by 9.1 per cent year-over-year to $371,474, according to the Royal LePage House Price Survey2 released today.
When broken out by housing type, the median price of a bungalow saw a steady increase of 6.1 per cent to $341,857 and the median price of a condominium increased by 7.8 per cent year-over-year to $234,436. During the same period, the price of a standard two-storey home had a double-digit increase of 10.0 per cent to $392,169.
"With sales up and a shortage in the number of listings, buyers in the region are often engaging in bidding wars," said Keith Church, broker of record, Royal LePage Grand Valley Realty. "Although we have less of a market for condos, we are seeing more people move to Kitchener, Waterloo or Cambridge attracted by lower prices here, as compared to those for similar properties available in the Greater Toronto Area."
Church added that there is a new housing development in south Kitchener, which has a lot of interest from potential buyers. "People are lining up to purchase a home in that particular area, which is not something we typically see outside of the more metropolitan areas in the region," said Church.
Nationally, Canada's residential real estate market continued to grow in the third quarter of 2016, posting a 12.0 per cent year-over-year aggregate house price increase to $545,414. The price of a two-storey home rose 13.7 per cent year-over-year to $649,635, and the price of a bungalow increased 11.0 per cent to $459,481. During the same period, the price of a condominium increased 5.8 per cent to $360,679.
"Across Canada, our real estate markets remain healthy, with home values showing modest to strong (yet rational) price appreciation in almost every Canadian city," said Phil Soper, president and chief executive officer, Royal LePage. "Even in the hardest hit oil patch regions, prices have held up well, with small single-digit declines, year-over-year."
On October 3, 2016, Federal Finance Minister Bill Morneau announced new measures specifically designed to cool the country's housing market and curtail foreign buying activity. These measures are meant to bring consistency to mortgage insurance rules by standardizing eligibility for high- and low-ratio insured mortgages, expanding stress tests, and improving tax fairness by removing the ability of non-residents to claim capital gain exemptions, which are only applicable to properties identified as principal residences.
"Consumer confidence suffered a direct hit when the federal government introduced new, more restrictive regulations in early October," said Soper. "While it is too early to say definitively, it appears Canadian homebuyers are adjusting quickly, and that fears of a hard correction were unwarranted. While the changes are significant, major lenders may already be using similar criteria when writing mortgages in sensitive regions like Alberta and B.C., so the additional drag on the market resulting from the new legislation won't be as great as it appears on the surface."
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, Brookfield RPS, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
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 17,000 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.
1 Aggregate prices are calculated via a weighted average of the median values of homes for reported property types in the regions surveyed
2 Powered by Brookfield RPS
SOURCE Royal LePage Real Estate Services
Image with caption: "Kitchener/Waterloo/Cambridge House Prices Increase Steadily in the Third Quarter of 2016 (CNW Group/Royal LePage Real Estate Services)". Image available at: http://photos.newswire.ca/images/download/20161013_C6694_PHOTO_EN_795042.jpg
For further information: Michael Jesus, Kaiser Lachance Communications, 647-725.2520 ext. 234, [email protected]