Strong demand and inventory shortage lead to higher real estate prices
in Canada's largest city
TORONTO, July 9, 2013 /CNW/ - The Royal LePage House Price Survey and
Market Survey Forecast released today showed modest growth in prices
for all housing types surveyed in Toronto.
Standard two-storey homes saw an increase of 2.2 per cent year-over-year
to $683,241 and detached bungalows increased by 3.1 per cent to
$577,495, while condominium prices remained relatively flat, increasing
by 0.7 per cent to $366,189.
"The home buying push we usually see towards the end of the first
quarter was delayed this year by the long winter, but the market has
picked up considerably over the past couple of months," said Gino
Romanese, Senior Vice President, Royal LePage. "Across all housing
types, we are seeing the continuation of a trend where low levels of
inventory combined with low interest rates are putting upward pressure
on house prices."
Romanese noted that the Toronto market continues to see multiple offer
situations in all property types. "In many areas, there are multiple
buyers vying for available homes," he said.
A noteworthy trend identified by Romanese is that developers are
increasingly turning to REALTORS® to sell the large supply of
condominiums becoming available in Toronto. In the past, these units
have often been sold directly to the consumer by the developer.
Looking ahead to the end of 2013, Royal LePage forecasts that prices
will rise by 2.5 per cent in the Toronto market, but will vary
depending on the type of home. "As well, we expect sales volumes in the
third and fourth quarters of this year to outpace those seen in the
second half of 2012."
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
