Healthy inventory levels push prices down for most area homes
SAINT JOHN, Jan. 12, 2012 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed year-over-year house prices in Saint John were largely flat or down slightly in the fourth quarter.
Detached bungalows decreased 2.2 per cent year-over-year to $179,946, while standard two-storey properties were flat, declining slightly 0.3 per cent compared to the same period last year. Standard condominiums were the exception, with average prices climbing 16.1 per cent year-over-year, though these gains resulted from the sale of a few higher-end resale units and are not reflective of the condo market as a whole.
"The average price of standard condominiums was skewed by the sale of several higher-end units in the Three Sisters condominium development," said John McAloney, broker and owner, Royal LePage Atlantic. "When looking at the market for standard condominiums in general, it more closely resembled the rest of the local market where a healthy supply of homes for sale kept prices essentially in line with the same period last year."
According to McAloney, the fourth quarter saw a significant year-over-year increase in inventory which led to a buyer's market in Saint John.
"We expect the buyer's market conditions to continue into the early part of 2012," he added.
Among those buying homes in the fourth quarter, the most active were those looking to take advantage of low interest rates. According to McAloney, this group included first-time buyers and move-up buyers but also included empty nesters looking to downsize.
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.
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