Average price forecast to increase modestly in 2012 as Toronto moves to a more balanced market
TORONTO, Jan. 12, 2012 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year price gains for most housing types surveyed in Toronto due to a lack of inventory and continued strong demand supported by low interest rates.
Detached bungalows witnessed the largest year-over-year price increase at 7.2 per cent to $532,137. Prices for standard two-storey homes rose 4.2 per cent year-over-year to $629,188, while standard condominiums saw an increase of 3.4 per cent to $347,659.
"Inventory has been a challenge for Toronto's potential buyers throughout 2011 and this restricted supply has put upward pressure on prices," said Gino Romanese, senior vice president, Royal LePage Real Estate Services Ltd. "Standard condominiums in the resale market saw a more modest increase due to a healthier supply that was created by newer units coming online. However, demand for older units has increased as they are generally larger in size and preferable to downsizers who are used to more space."
In 2012, Royal LePage expects that real estate values in Toronto will increase 2.6 per cent compared to 2011. Romanese noted that for years, real estate values in Toronto have made substantial gains fueled by sustained low interest rates and strong immigration, which has had an impact on affordability.
Nationally, despite calls in some quarters for Canadian house prices to soften in 2011, the market proved resilient as demand created by low interest rates and a relatively stable national economy created upward pricing pressure for all housing types surveyed. Further, recent high profile reports forecasting significant house price declines in 2012 are not supportable. In the fourth quarter, standard two-storey homes rose 4.2 per cent year-over-year to $375,427, while detached bungalows increased 6.1 per cent to $344,392. Average prices for standard condominiums increased 3.6 per cent to $234,680.
"In the recovery period following the 2008-2009 recession, I found myself repeatedly speaking of 'irrational exuberance' in the Canadian housing market," said Phil Soper, president and chief executive of Royal LePage Real Estate Services. "Expectations were too high and the pace of expansion unsustainable. With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can't be justified. The industry has significant momentum entering the year, and is buoyed by the stimulative effect of very low interest rates; we expect the market to continue to expand - albeit at a slower pace."
Royal LePage expects average price growth to continue through 2012 and predicts national average prices to increase by 2.8 per cent by the end of the year.
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 Web site at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the fourth quarter 2011. A printable version of the fourth quarter 2011 survey will be available online on February 10th, 2011.
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 & 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.
For further information:
Sarah Louise Gardiner
Director, Global Communications & Public Relations
Royal LePage Real Estate Services