Montreal posts house price gains during the fourth quarter of 2012 and further increases are anticipated for 2013

Repeat buyers and increased sales of high-end homes upwardly skewed average prices;
Correction not likely if global economy continues to recover in the upcoming year

MONTREAL, Jan. 8, 2013 /CNW/ - Today's House Price Survey and Market Survey Forecast, issued by Royal LePage, reports that house prices on the Island of Montreal were up in the fourth quarter when compared with the same period last year. Due to the influence of new mortgage lending rules, first-time buyers were less active in the fourth quarter than in preceding years. However, repeat buyers were more active, which stimulated sales of high-end homes and upwardly skewed the average price of homes surveyed in the metropolitan area. Royal LePage is expecting the average house price to increase slightly in 2013, although the actual number of sales is expected to slightly decrease.

In the fourth quarter of 2012, the average price of a detached bungalow increased to $282,911, which was 2.2 per cent year-over-year increase. The average price of a standard two-storey house increased 5.3 per cent to $379,546, while standard condominiums rose 4.7 per cent to $240,272.

"Given the new mortgage lending rules, which came into effect during the summer, first-time buyers were much less active in the market than in previous years. That being said however, high-end homes sold well, leaving behind a sizeable inventory of more affordable housing and upwardly skewed average house prices," said Dominic St-Pierre, director, Royal LePage Real Estate Services for the Quebec Region,

"Luxury home buyers were more active this year and we're seeing homes valued at more than a million dollars selling quite well. However, multiple offers have become relatively rare in our market, with the exception of very desirable listings with an attractive price," added St-Pierre.

The reluctance of first-time buyers has also had an effect on the total inventory of properties. "Currently, the market has a large inventory of more affordable homes because the new mortgage lending rules have dampened first-time home buyer activity compared to the same period in previous years, where they were more active. This decreased activity has had a direct impact on repeat buyers, who need to sell their current property in order to purchase a new one. The inventory of standard condominiums was most affected this past year and witnessed more than a 30 per cent increase over the previous year's figures," noted St-Pierre.

In 2013, house prices will continue to rise, although more modestly, and should be 3.8 per cent higher by year end. In this respect, St-Pierre is optimistic. "Despite the fact that some financial institutions are forecasting that prices will remain stable or even decline, we believe that the growth we've seen over the last few months will continue well into 2013. The one drawback will be that the actual number of sales will probably see a decrease of 2.4 per cent. Pressure exerted by new condominium developments should also have a significant impact on the resale market, as it will not only boost competition but also slow price increases for this property type. However, the number of single-family homes on the market dropped in November, which is a sign that supply and demand should be in better balance in 2013."

Once again this year, the biggest factor impacting Quebec's real estate market will be consumer confidence. "We already know that interest rates will remain low and that the unemployment rate will stay favourable as well, so the remaining key factor affecting the real estate market will be how confident Quebec buyers feel. The confidence level is not at its highest right now, but it's not at its lowest either. Any positive or negative influence on consumer confidence will likely be due to factors outside Quebec. While the housing market and the overall economy in the U.S. are showing signs of recovery, the situation in Europe remains concerning, and that could eventually have an impact on our market," concluded St-Pierre.

House price survey in Canada for the fourth quarter of 2012

Average house prices

Detached bungalow
Market	Average Q4 2012	Average last quarter	Average Q4 2011	Difference (%) Detached bungalow
Beaconsfield	330,250	331,000	307,500	7.4%
Dorval	290,000	305,000	290,000	0.0%
Pierrefonds	285,000	289,000	288,500	-1.2%
Westmount*	n/a	n/a	n/a	n/a
Notre-Dame-de-Grâce/ Côte-des-Neiges*	n/a	n/a	n/a	n/a
Ville-Marie*	n/a	n/a	n/a	n/a
Plateau Mont-Royal*	n/a	n/a	n/a	n/a
Rosemont/La Petite Patrie*	n/a	n/a	n/a	n/a
Laval	279,000	276,000	271,000	3.0%
Brossard	256,750	263,500	255,000	0.7%
Longueuil	249,000	247,000	240,000	3.8%
Boucherville	290,375	301,000	286,500	1.4%
Montreal	282,911	287,500	276,929	2.2%

*Type of property not covered in the market

Two-storey house
Market	Average Q4 2012	Average last quarter	Average Q4 2011	Difference (%) Two-storey house
Beaconsfield*	n/a	n/a	n/a	n/a
Dorval	306,500	316,000	277,500	10.5%
Pierrefonds	387,750	397,000	390,000	-0.6%
Westmount*	n/a	n/a	n/a	n/a
Notre-Dame-de-Grâce/ Côte-des-Neiges	499,750	510,000	470,000	6.3%
Ville-Marie*	n/a	n/a	n/a	n/a
Plateau Mont-Royal*	n/a	n/a	n/a	n/a
Rosemont/La Petite Patrie*	n/a	n/a	n/a	n/a
Laval	334,625	358,500	320,000	4.6%
Brossard	373,200	379,000	357,500	4.4%
Longueuil	335,000	335,000	338,250	-1.0%
Boucherville	420,000	419,000	370,000	13.5%
Montreal	379,546	387,786	360,464	5.3%

*Type of property not covered in the market

Standard condominium
Market	Average Q4 2012	Average last quarter	Average Q4 2011	Difference (%) Standard condominium
Beaconsfield*	n/a	n/a	n/a	n/a
Dorval*	n/a	n/a	n/a	n/a
Pierrefonds	208,500	203,750	203,000	2.7%
Westmount*	n/a	n/a	n/a	n/a
Notre-Dame-de-Grâce/ Côte-des-Neiges	266,750	246,000	241,250	10.6%
Ville-Marie	325,000	324,500	305,000	6.6%
Plateau Mont-Royal	320,000	315,650	307,750	4.0%
Rosemont/La Petite Patrie	271,200	270,000	254,250	6.7%
Laval	195,000	194,000	190,000	2.6%
Brossard	189,000	189,000	192,500	-1.8%
Longueuil	177,000	180,000	168,000	5.4%
Boucherville	210,000	210,000	204,000	2.9%
Montreal	240,272	236,989	229,528	4.7%

*Type of property not covered in the market

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 2012. A printable version of the fourth quarter 2012 survey will be available online on February 6, 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 & 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

Laetitia Rampazzo
High Road Communications
514.908.0110, poste 307
[email protected]

Tammy Gilmer
Director, Public Relations
Royal LePage
416.510.5783