MONTREAL HOUSE PRICES SEE HEALTHY INCREASES IN THE FOURTH QUARTER AND PRICES EXPECTED TO INCREASE AT MODERATE PACE IN 2011

Low interest rates and consumer confidence have contributed to the run up in prices, but the anticipated drop in demand will stabilize prices over the coming year

MONTREAL, Jan. 6 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed an increase in prices during the last several months for all property types surveyed on the island of Montreal. Low interest rates and consumer confidence have led to the increase in prices recorded in the fourth quarter. Royal LePage expects the Montreal market to be more balanced in the coming year and housing prices to remain steady.

During the fourth quarter, the average price of detached bungalows increased 8.7 per cent to $265,383. The price of standard two-storey homes rose by 8.7 per cent to $375,222, while the average price of standard condominiums jumped 11.3 per cent to $240,000.

"All property types appreciated in price during the fourth quarter. Prices continued to increase in the fourth quarter despite expectations to the contrary. Buyers returned to the market in November 2010 and bought up properties as they became available, and the expected rise in inventory didn't occur. The South Shore real estate market outperformed the Montreal market in the fourth quarter due to lower price levels in that region, the expected tax hikes on the island of Montreal and consumers' desire to own a more spacious home in the suburbs," explains Dominic St-Pierre, director of Royal LePage Real Estate Services for the Québec region. "Low interest rates and improving consumer confidence are the key factors driving the continuous price increases."

The fourth quarter saw a slight drop in the number of units sold. "November 2010 was the best month in the history of real estate in Québec for total value of homes sold. There was a 6 per cent increase in volume, and a 6 per cent drop in transactions at the same time. In other words, fewer homes were sold, but they were sold at a higher price. The slight drop in demand was offset by lower supply, explaining why prices held steady," Dominic St-Pierre added.

The Montreal real estate market has gradually adapted to recent economic changes. The market proved very volatile in 2010 but is expected to be more stable in 2011. "This year, demand is expected to fall in comparison to supply. It will occur gradually, probably in the first six months of 2011, so we'll see prices stabilize. However, this is not likely to result in falling prices, as some predict. Property values are expected to continue to rise by an average of 4 per cent over the course of the year. The increase is primarily explained by the lack of new real estate projects on the island of Montreal and by continued low interest rates, proving positive for the real estate market. In 2011, the market will be solid and balanced," he concludes.

Survey of Canadian House Prices in Canada for the Fourth Quarter of 2010

Average House Prices

Detached Bungalow
Market Average
4Q - 2010
Last Quarter
Average
Average
4Q - 2009
Bungalow
Price Change
(%)
Beaconsfield 340,000 310,000 305,000 11.5 %
Boucherville 255,000 265,000 253,600 0.6 %
Côte-Saint-Luc 270,000 251,000 245,000 10.2 %
Dorval 260,000 275,000 250,000 4.0 %
Lachine 250,000 265,000 230,000 8.7 %
Lasalle/Verdun 235,000 207,000 206,000 14.1 %
Montreal West* n/a n/a n/a n/a
Notre-Dame-de-Grâce* n/a n/a n/a n/a
Saint-Bruno 248,063 236,250 223,900 10.8 %
Saint-Lambert 265,000 250,000 240,000 10.4 %
Westmount* n/a n/a n/a n/a
Montreal 265,383 257,406 244,188 8.7 %

*Type of property not covered in the sector

Standard Two-Story House
Market Average
4Q - 2010
Last Quarter
Average
Average
4Q - 2009
Two-Story House
Price Change
(%)
Beaconsfield 392,000 392,000 380,000 3.2 %
Boucherville 340,000 326,500 292,600 16.2 %
Côte-Saint-Luc* n/a n/a n/a n/a
Dorval 278,000 275,000 252,000 10.3 %
Lachine 277,000 275,000 240,000 15.4 %
Lasalle/Verdun* n/a n/a n/a n/a
Montreal West 385,000 374,000 370,000 4.1 %
Notre-Dame-de-Grâce 425,000 385,000 382,000 11.3 %
Saint-Bruno 275,000 267,750 249,000 10.4 %
Saint-Lambert 310,000 305,000 286,000 8.4 %
Westmount 695,000 668,000 655,000 6.1 %
Montreal 375,222 363,139 345,178 8.7 %

*Type of property not covered in the sector

Standard Condominium Unit
Market Average
4Q - 2010
Last Quarter
Average
Average
4Q - 2009
Condominium
Unit Price
Change
(%)
Beaconsfield n/a n/a n/a n/a
Boucherville 208,000 196,222 173,500 19.9 %
Côte-Saint-Luc 255,000 238,000 236,000 8.1 %
Dorval 230,000 240,000 220,000 4.5 %
Lachine 275,000 280,000 253,000 8.7 %
Lasalle/Verdun 190,000 169,000 163,000 16.6 %
Montreal West* n/a n/a n/a n/a
Notre-Dame-de-Grâce 268,500 237,000 234,000 14.7 %
Saint-Bruno 188,500 187,000 185,000 1.9 %
Saint-Lambert 205,000 190,000 177,000 15.8 %
Westmount 340,000 305,000 300,000 13.3 %
Montreal 240,000 226,914 215,722 11.3 %

*Type of property not covered in the sector

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 www.royallepage.ca.  Current figures will be updated following the complete tabulation of the data for the fourth quarter 2010. A printable version of the fourth quarter 2010 survey will be available online on February 4th, 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.  Historical data is available for some areas back to the early 1970s

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 symbol TSX:BRE.

SOURCE Royal LePage Real Estate Services

For further information:

Valérie Dupuis
Fleishman Hillard Inc.
514 866-6776, ext. 312

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


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