Economic uncertainty and tightened mortgage rules keep buyers on the
sidelines
VANCOUVER, July 9, 2013 /CNW/ - The Royal LePage House Price Survey and
Market Survey Forecast released today showed year-over-year price
decreases across all housing types surveyed in Vancouver.
Standard condominium prices decreased by 3.3 per cent year-over-year to
$490,475, while detached bungalows decreased 3.2 per cent to
$1,052,500. Standard two-storey home prices also saw a moderate drop
of 2.3 per cent to $1,151,250. Interestingly, however, this represents
an upward trend when compared to the first quarter of 2013, where price
decreases were greater than 5.0 per cent across the board.
"The recent changes in mortgage rules have affected a number of buyer
groups," said Bill Binnie, broker and owner of Royal LePage North
Shore. "First-time buyers can't enter the market as easily and
investors are less able to meet the new equity requirements."
According to brokers in the region, the political and economic
environment also contributed to sluggish prices early in the quarter.
"Buyers were uncertain about the economic outlook in the lead up to the
recent provincial election," said Chris Simmons, broker and owner of
Royal LePage Westside. "Tightened immigration policies have also been a
factor. Our market is largely fueled by immigration and reductions
quickly show up in prices and activity levels."
Looking ahead, Royal LePage forecasts that home prices in Vancouver will
rise by approximately 2.0 per cent in 2013. "Buyers are starting to
gain more confidence in the economic and political future," added
Binnie. "As they start to re-enter the market, prices will begin to
rise again."
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
