Balanced market emerged as demand offset by fewer sales and healthy inventory
VICTORIA, Jan. 12, 2012 /CNW/ - According to the Royal LePage House Price Survey and Market Survey Forecast released today, fourth quarter house prices in Victoria were flat or down slightly compared to the same period last year.
Detached bungalows and standard condominiums posted slight price declines, falling 0.8 and 1.1 per cent respectively, with average prices of 486,000 and 282,000. Standard two-storey homes posted no year-over-year change with prices remaining at $480,000.
"Low interest rates continued to drive demand in the fourth quarter but were offset by an eight per cent year-over-year decrease in sales and healthy inventory levels for all housing types surveyed," said Carol Geurts, Royal LePage Coast Capital Realty. "This led to the balanced market conditions we saw as 2011 came to a close."
According to Geurts, first-time home buyers were among the most active in the fourth quarter as they looked to take advantage of attractive interest rates. Demand from first-time buyers led to a strong fourth quarter rally in prices for detached bungalows and standard condominiums. This resulted in prices that were nearly in line with the fourth quarter of 2010 after the softening witnessed earlier last year.
Geurts also noted that despite the balance in the market, competitively priced homes in the city's most attractive neighbourhoods drew considerable interest from prospective buyers, leading to a number of multiple offer situations.
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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