New mortgage regulations slows first-time buyer activity in Saskatoon
SASKATOON, Jan. 8, 2013 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year house price increases for detached bungalows and standard condominiums in Saskatoon, while standard two-storey homes made modest gains.
Detached bungalows posted a strong year-over-year increase of 8.8 per cent, to an average price of $363,750. Standard two-storey homes saw a 2.2 per cent increase over the same quarter last year, selling for an average of $376,750, as supply and demand began to balance. Standard condominiums sold for an average price of $261,333, increasing 12.5 per cent year-over-year. Fisher noted that the increase in the average price of standard condominiums reflects the sample average being skewed by higher end units that were sold as opposed to a general increase overall.
"Market activity in the fourth quarter was healthy and especially strong among single-family homes and condominiums priced above $350,000," said Norm Fisher, Royal LePage Saskatoon Real Estate. "Entry-level properties took somewhat of a hard hit this quarter as a large portion of first-time buyers delayed entering the market due to new mortgage regulations introduced in 2012."
Fisher commented that inventory levels are slightly below year-over-year averages. However, there is still a good amount of supply on hand to meet the needs of buyers.
"Saskatoon's economy is exceptionally diverse with strengths in many areas including natural resources, bio-sciences and even small businesses - our strong job sector should continue to fuel our market as we move into 2013," added Fisher.
Nationally, the average price of a home increased year-over-year between 2.0 and 4.0 per cent in the fourth quarter of 2012. In the fourth quarter, standard two-storey homes rose 4.0 per cent year-over-year to $390,444, while detached bungalows increased 3.6 per cent to $356,790. National average prices for standard condominiums increased 2.0 per cent to $239,374.
As home sales volumes slowed in the second half of 2012, the average Canadian house price, for the most part, held firm. Some consumers delayed their entry into the market during 2012, faced with economic uncertainty as governments in both the U.S. and Europe struggled with debt management plans and as homes in some regions became less affordable. Compared to 2012, fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices are rising.
Phil Soper, president and chief executive, Royal LePage, noted that the housing market is well into a cyclical correction and that fears of a sharp or drawn out collapse are unwarranted. Home prices have risen faster than salaries and wages for three years and the market requires time to adjust. By the end of 2013, Royal LePage expects the average national home price to be 1.0 per cent higher compared to 2012.
"A helpful comparison is to reflect on the beginning of 2009 when the country was in the grips of a very grim global recession," said Soper. "It was a bleak time, with plunging consumer confidence driven by rapidly spreading unemployment. The meltdown of the American banking and finance sector had sent their housing market into a downward spiral and our own real estate market saw home sale transactions fall dramatically. Price appreciation in Canada ground to a halt, but home values dropped only slightly. With economic fundamentals such as employment levels improving, we expect this cyclical correction to be short-lived."
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
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