Low interest rates and limited housing inventory put upward pressure on home prices
VICTORIA, Oct. 13, 2016 /CNW/ - The aggregate1 price of a home in Victoria rose in the third quarter of 2016, increasing 8.8 per cent year-over-year to $537,228, according to the Royal LePage House Price Survey2 released today.
When broken out by housing type, the median price of a two-storey home saw a significant increase of 17.7 per cent year-over-year to $750,617. During the same period, the median price of a bungalow increased 8.8 per cent to $549,719. Condominium prices saw some softness, declining 1.1 per cent year-over-year to $384,421.
"The Victoria economy continues to be quite strong," said Bill Ethier, president and managing broker, Royal LePage Coast Capital Realty. "The low dollar is keeping employment and tourism strong, coupled with lower inventory across all categories. It is still a seller's market in Victoria, with more than 50 per cent of our properties going for above asking price."
Nationally, Canada's residential real estate market continued to grow in the third quarter of 2016, posting a 12.0 per cent year-over-year aggregate house price increase to $545,414. The price of a two-storey home rose 13.7 per cent year-over-year to $649,635, and the price of a bungalow increased 11.0 per cent to $459,481. During the same period, the price of a condominium increased 5.8 per cent to $360,679.
"Across Canada, our real estate markets remain healthy, with home values showing modest to strong (yet rational) price appreciation in almost every Canadian city," said Phil Soper, president and chief executive officer, Royal LePage. "Even in the hardest hit oil patch regions, prices have held up well, with small single-digit declines, year-over-year."
On October 3, 2016, Federal Finance Minister Bill Morneau announced new measures specifically designed to cool the country's housing market and curtail foreign buying activity. These measures are meant to bring consistency to mortgage insurance rules by standardizing eligibility for high- and low-ratio insured mortgages, expanding stress tests, and improving tax fairness by removing the ability of non-residents to claim capital gain exemptions, which are only applicable to properties identified as principal residences.
"Consumer confidence suffered a direct hit when the federal government introduced new, more restrictive regulations in early October," said Soper. "While it is too early to say definitively, it appears Canadian homebuyers are adjusting quickly, and that fears of a hard correction were unwarranted. While the changes are significant, major lenders may already be using similar criteria when writing mortgages in sensitive regions like Alberta and B.C., so the additional drag on the market resulting from the new legislation won't be as great as it appears on the surface."
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, Brookfield RPS, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
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 over 17,000 real estate professionals in more than 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 and 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 symbol TSX:BRE.
For more information visit: www.royallepage.ca.
1 Aggregate prices are calculated via a weighted average of the median values of homes for reported property types in the regions surveyed
2 Powered by Brookfield RPS
SOURCE Royal LePage Real Estate Services
Image with caption: "Victoria Home Prices See Sizable Growth in the Third Quarter of 2016 (CNW Group/Royal LePage Real Estate Services)". Image available at: http://photos.newswire.ca/images/download/20161013_C8580_PHOTO_EN_795056.jpg
For further information: Eddie Tabakman, Kaiser Lachance Communications, 647-680-8316, email@example.com