Healthy inventory levels and low interest rates favour buyers
VICTORIA, BC, July 10, 2012 /CNW/ - The Royal LePage House Price Survey and Market Survey Forecast released today showed year-over-year price decreases among all housing types surveyed in Victoria.
Prices for detached bungalows fell an average of 3.2 per cent year-over-year to $460,000, while standard two-storey homes posted a similar decline, falling 3.4 per cent year-over-year to $461,000. Standard condominiums posted the largest price decrease, falling 4.8 per cent year-over-year to $280,000.
"Low interest rates continued to drive demand in the second quarter of 2012," said Carol Geurts, Royal LePage Coast Capital Realty. "However, inventory levels have also risen as expected, and are likely to meet or exceed figures from last year. As a result, buyers currently have the benefit of greater choice and many are taking the time to shop around before putting in an offer."
Geurts explains that first-time buyers, and seniors looking to downsize continue to be very active groups in Victoria's real estate market.
"At this time of year, we also see government transfers which continue to be one of the driving forces behind our spring market," added Geurts. "Victoria has always been a destination of choice and with one of the best climates in Canada, we anticipate that will continue to attract buyers from across the country."
Nationally, in the second quarter, standard two-storey homes rose 4.7 per cent year-over-year to $408,423, while detached bungalows increased 5.5 per cent to $376,311. Average prices for standard condominiums increased 3.3 per cent to $245,825. During this period, signs from across the country clearly indicated that the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.
"We have had three years of solid house price appreciation in almost all regions of the country," said Phil Soper, president and CEO of Royal LePage Real Estate Services. "Confidence in Canada's real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates."
The first-time buyer segment of the population, which represents up to half or all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.
"The most recent set of mortgage changes, the fourth in four years, is also the most aggressive. The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord. The timing of this intervention was unfortunate," added Soper.
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 second quarter 2012. A printable version of the second quarter 2012 survey will be available online on August 9, 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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