Lack of inventory, low mortgage rates and good economic conditions drive demand
TORONTO, April 5, 2012 /CNW/ - The Royal LePage House Price Survey released today showed healthy year-over-year price gains for all housing types surveyed in Toronto confirming that the city is still in a seller's market.
Standard two-storey homes posted the largest price increases rising 7.5 per cent year-over-year to $645,467, while detached bungalows rose 5.5 per cent year-over-year to $544,450. Standard condominiums witnessed an increase of 3.5 per cent to $353,355 compared to the same period last year.
"There is not enough supply to keep up with the strong demand created by historically low mortgage rates," said Cam Forbes, broker, Royal LePage Real Estate Services Ltd. "As multiple offers are common place and the bidding process can be very emotional, it is important that potential buyers receive sound counsel when making offers."
Despite correction concerns in the condominium market, Forbes commented that roughly half of all resale property transactions are condominiums, which reflects strong demand for this housing type.
"As affordability erodes for houses in the city, purchasing a condominium is the best opportunity for many Torontonians to become homeowners," said Forbes.
Nationally, market activity in the first quarter of 2012 was unusually high resulting in tight inventories and strong price appreciation in most major cities. Buyers were attracted into the market by historically low mortgage rates and sellers brought listing inventory to market earlier than normal, encouraged by unseasonably warm weather.
In the first quarter, Canada's average standard two-storey homes rose 5.0 per cent year-over-year to $398,282, while detached bungalows increased 4.4 per cent to $356,306. Average prices for standard condominiums increased 2.2 per cent to $243,153.
"Our housing market is being pulled in opposite directions by opposing economic forces," said Phil Soper, president and chief executive of Royal LePage Real Estate Services. "On one hand, there is the rapidly strengthening U.S. economy, increasing Canadian consumer confidence and what can only be called a national mortgage sale encouraging activity and bidding up home prices. On the other, we have signs of over-shooting values and strained affordability in our largest cities. We are likely to see much more modest price appreciation as the year unfolds."
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 first quarter 2012. A printable version of the first quarter 2012 survey will be available online on May 2, 2012.
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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Royal LePage Real Estate Services