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Canada's Housing Market Forecast to Perform Strong and Steady Through 2007, with Astounding Momentum from Solid Second Quarter |
Average house prices set to rise by 9.5 per cent nationally
TORONTO, July 5, 2007 - Canada's resale housing market finished the second quarter on strong and steady footing; surprising many by its astounding momentum. Healthy and robust conditions are expected to prevail through to year's end as all regions are poised to experience a rise in average house prices, with double-digit gains forecast for Edmonton, Calgary, Winnipeg and Regina, according to a report released today by Royal LePage Real Estate Services.
Echoing the growth and activity experienced in all Canadian markets in the first half of the year, the national average house price is forecast to rise by 9.5 per cent, passing the $300,000 mark for the first time, to $303,300. Home sale transactions are projected to rise by 8 per cent to 522,306 unit sales by the end of 2007.
“The momentum from the year's extraordinary start spilled into the second quarter, compounding typically busy spring market activity and stimulating solid price appreciations in almost all regions of the country. These conditions will certainly be an impetus characterizing Canada's real estate market through to year's end,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services. “As we move into the second half of the year, we continue to expect areas of aggressive price appreciation in the west, and modest, mid-single digit price increases in Central and Atlantic Canada.”
Added Soper: “The most profound story in Canadian real estate today is the extraordinary interest that people across our country continue to have in buying and selling homes. The sheer number of homes trading hands this year has far exceeded consensus expectation. This market continues to show strength as we move into the second half of the year.”
New to the stage of regional players exhibiting extreme home sales activity and searing house price increases is Saskatchewan. Record numbers of homes sold in both Regina and Saskatoon in the second quarter as intense demand was driven by a swell of in-migration of Saskatchewanians returning from expensive Alberta living. These frenetic conditions are expected to continue, albeit at a slightly more temperate pace.
Energy rich Alberta's potent economy continued to attract in-migration; however, the runaway prices and activity that have characterized Calgary and Edmonton for the past eighteen months have started to ease and will continue to return to more manageable conditions as the year presses onwards. Most notable during the second quarter was the change in Calgary's inventory levels, which increased substantially as some sellers decided to cash in on their home equity. This increased supply, combined with the natural dampening effect that high prices have on demand, is leading to more balanced conditions and a stabilizing of average price appreciations.
Looking ahead, Central Canada should continue to enjoy balanced market conditions. More modest increases can be expected as we move into the traditionally slower second half of the year. The combination of healthy regional economies and job markets, population growth and the recognition that real estate is a sound investment, will continue to attract buyers and bolster demand for housing.
In Toronto, an unseasonable spike in activity may occur in the fall as some buyers react to the city-proposed increase in land transfer taxes for the area, jumping into the market before the proposed taxes are to go into effect.
Anticipated growth of the oil sector in St. John's, Saint John and Fredericton is expected to create an abundance of jobs in Atlantic Canada and maintain the buoyancy of the eastern market, compensating for the significant loss of trades people who have flocked to Alberta.
“During the first half of the year, strong economic fundamentals fuelled consumer confidence and reasonable affordability drove housing demand across the country. In most provinces, inventory levels were up slightly year-over-year, helping to balance the national market, ” commented Soper.
Of the housing types surveyed, the highest average price appreciation occurred in detached bungalows, which rose by 15.4 per cent to $338,738, followed by standard two-storey properties, which rose to $399,469 (13.2%), and standard condominiums, which increased to $238,784 (15.1%), year-over-year.
Survey of Canadian House Prices Second Quarter 2007
Average House Prices
| |
Standard Detached Bungalow |
| Market |
Q2 2007 Average |
Q2 2006 Average |
% Change |
| Halifax |
197,667 |
182,000 |
8.6% |
| Charlottetown |
147,000 |
145,000 |
1.4% |
| Moncton |
142,000 |
133,000 |
6.8% |
| Fredericton |
155,000 |
155,000 |
0.0% |
| St. John's |
147,000 |
143,667 |
2.3% |
| Atlantic |
157,733 |
151,733 |
4.0% |
| Montreal |
223,864 |
211,160 |
6.0% |
| Ottawa |
303,083 |
285,917 |
6.0% |
| Toronto |
398,647 |
376,223 |
6.0% |
| Winnipeg |
207,750 |
185,700 |
11.9% |
| Regina |
204,000 |
143,250 |
42.4% |
| Saskatoon |
281,250 |
180,250 |
56.0% |
| Calgary |
459,889 |
371,200 |
23.9% |
| Edmonton |
374,143 |
253,857 |
47.4% |
| Vancouver |
787,750 |
708,000 |
11.3% |
| Victoria |
382,000 |
368,000 |
3.8% |
| National |
338,738 |
293,618 |
15.4% |
| |
Standard 2-Storey |
| Market |
Q2 2007 Average |
Q2 2006 Average |
% Change |
| Halifax |
227,000 |
198,333 |
14.5% |
| Charlottetown |
180,000 |
175,000 |
2.9% |
| Moncton |
142,000 |
133,000 |
6.8% |
| Fredericton |
190,000 |
193,000 |
-1.6% |
| St. John's |
206,667 |
206,000 |
0.3% |
| Atlantic |
189,133 |
181,067 |
4.5% |
| Montreal |
333,652 |
319,134 |
4.5% |
| Ottawa |
299,667 |
281,833 |
6.3% |
| Toronto |
517,659 |
474,766 |
9.0% |
| Winnipeg |
227,613 |
201,625 |
12.9% |
| Regina |
181,917 |
152,925 |
19.0% |
| Saskatoon |
305,000 |
196,500 |
55.2% |
| Calgary |
465,678 |
397,867 |
17.0% |
| Edmonton |
397,857 |
281,286 |
41.4% |
| Vancouver |
875,750 |
792,375 |
10.5% |
| Victoria |
414,000 |
402,000 |
3.0% |
| National |
399,469 |
352,776 |
13.2% |
| |
Standard Condominium |
| Market |
Q2 2007 Average |
Q2 2006 Average |
% Change |
| Halifax |
145,000 |
138,500 |
4.7% |
| Charlottetown |
100,000 |
98,000 |
2.0% |
| Moncton |
- |
- |
|
| Fredericton |
130,000 |
125,000 |
4.0% |
| St. John's |
153,333 |
149,333 |
2.7% |
| Atlantic |
105,667 |
102,167 |
3.4% |
| Montreal |
201,694 |
191,308 |
5.4% |
| Ottawa |
191,667 |
178,167 |
7.6% |
| Toronto |
274,262 |
256,178 |
7.1% |
| Winnipeg |
117,260 |
107,065 |
9.5% |
| Regina |
118,300 |
94,500 |
25.2% |
| Saskatoon |
205,000 |
111,000 |
84.7% |
| Calgary |
300,078 |
235,567 |
27.4% |
| Edmonton |
263,333 |
175,833 |
49.8% |
| Vancouver |
419,250 |
369,000 |
13.6% |
| Victoria |
260,000 |
229,000 |
13.5% |
| National |
238,784 |
207,431 |
15.1% |
The Royal LePage Survey of Canadian House Prices 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 80 communities across the country. A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca, and current figures will be updated following the end of the second quarter. A printable version of the second quarter 2007 survey will be available online on August 15, 2007.
Housing values in the Royal LePage 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. Historical data is available for some areas back to the early 1970s.
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