Market activity slows as both buyers and sellers postpone real estate decisions to time the market
VANCOUVER, Jan. 8, 2013 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed modest year-over-year price declines for standard two-storey homes and detached bungalows in Vancouver. Standard condominiums, due to ample inventory, posted the largest average price decline.
Detached bungalows decreased slightly year-over-year by 1.6 per cent to $1,001,250. Standard two-storey homes posted a similar decline, decreasing 1.3 per cent year-over-year to $1,102,500, while standard condominiums decreased 3.6 per cent year-over-year to $481,250.
"The real estate market has been slow in Vancouver over the past eight months," said Bill Binnie, broker and owner of Royal LePage North Shore. "Sellers have not been bringing their listings to the market because prices have not been competitive while buyers have been sitting on the fence hoping prices will go down. The reality is that sellers are not interested in making any significant reductions in price and with our good local economy and healthy employment, there has not been pressure for them to sell." According to Binnie, multiple offer situations have been rare.
Looking ahead to 2013, Royal LePage predicts that there will be fewer high-end sales causing average prices to finish the year 3.0 per cent lower than the end of 2012.
Chris Simmons, broker and owner of Royal LePage Westside & City Centre, commented that savvy buyers recognize that Vancouver's growing population and diversified economy have provided a price floor making Vancouver a sound long-term investment. These buyers are active in the market and are taking advantage of the opportunity to calmly negotiate without multiple offer situations.
"It's been quite some time since buyers had an opportunity like this in Vancouver," he added. "However, despite that the current market has provided some relief from price appreciation, buyers should not expect a significant drop in prices. In order for that to happen, there would need to be considerably more inventory available," Simmons added.
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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