Positive economic news fuels growth in all housing types
ST. JOHN'S, July 9, 2013 /CNW/ - The Royal LePage House Price Survey and
Market Survey Forecast released today showed strong year-over-year
price increases across all housing types surveyed in St. John's.
The price of detached bungalows rose by 5.2 per cent to $290,000 and
standard two-storey homes climbed by 6.8 per cent to $392,667.
Condominiums experienced the greatest price increase, a sizable 7.5 per
cent, to $309,333.
"Although the housing market faltered early in the quarter on news that
the provincial government would initiate layoffs, the market picked up
later in the quarter with the news of new oil fields," said Glenn
Larkin, agent at Royal LePage Professional. "First-time buyers are
contributing to the growth, but move-up and executive home buyers are
also becoming more active."
"We're also starting to see inventory shortages in some specific
segments," added Larkin. "Most first-time buyers are looking for homes
in the $300,000 range, and we're low on listings for this category.
We're also seeing a shortage in the $600,000-900,000 range of executive
homes. The low supply at both ends of the market is starting to drive
up prices."
Larkin predicted that prices will rise another 2.0 to 3.0 per cent
before the end of 2013. Unit sales are also expected to increase
slightly, while inventory is expected to continue to decrease, as
planned oil projects bring an influx of new residents to the area.
Nationally, in the second quarter, standard two-storey homes and
detached bungalows both showed a year-over-year average price increase
of 2.7 per cent to $419,614 and $386,547, respectively. Average prices
for standard condominiums showed a more modest increase during the same
period, rising 1.2 per cent to $248,750. Royal LePage forecasts that
house prices will see modest gains throughout the remainder of 2013,
projecting a 3.0 per cent increase for the full year when compared to
2012.
Dialogue concerning the direction of Canada's housing market has
remained front and centre in recent months. Changes to Canada's
mortgage lending rules in mid-2012 coupled with concerns about consumer
debt levels, housing affordability in cities like Toronto and Vancouver
and continued international economic uncertainty have prompted a number
of analysts to forecast large downward price adjustments.
"As we have stated consistently since the current market downturn began
late in the second quarter of 2012, this is a normal cyclical
correction which brings fewer home sales and softer prices. Those
hoping their predictions of a bursting bubble and cataclysmic drops in
home values will come true are out of luck again," said Phil Soper,
president and chief executive of Royal LePage. "Price appreciation in
most markets across the country has been well below the long-term
average for Canada and will remain so through to the end of the year.
We expect to see the number of homes trading hands to begin to rise
slightly on a year-over-year basis in the second half of 2013, with
price softness continuing until mid-2014, at which point we'll see an
emergence from the current cycle."
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 website at www.royallepage.ca. Current figures will be updated following the complete tabulation of
the data for the second quarter of 2013. A printable version of the
second quarter 2013 survey will be available online on August 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
14,500 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 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.
SOURCE: Royal LePage Real Estate Services
