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Sladja Stojkovic
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The New Year Heralds In a Seller’s Market In Canada’s Largest Cities

Conditions are ripe for as strong a market as the post-recessionary rebound

TORONTO, January 9, 2014 – According to the Royal LePage House Price Survey and Market Survey Forecast released today, the average price of a home in Canada increased between 1.2 per cent and 3.8 per cent in the fourth quarter of 2013.

The survey showed year-over-year average price increases in the fourth quarter of 2013 of 3.6 per cent to $418,282 for standard two-storey homes and 3.8 per cent to $380,710 for detached bungalows, while the average price of a standard condominium rose 1.2 per cent to $246,530. Prices are expected to maintain healthy momentum into 2014, with Royal LePage projecting a 3.7 per cent increase nationally from 2013 and a shift to a seller’s market in the first portion of the year.

“A few short months ago, the country’s housing market emerged from a year-long correctional cycle of dramatically slowed sales volumes. Later 2013 was marked by a transition to buoyant sales volumes and above average price growth,” said Phil Soper, president and chief executive of Royal LePage. “In the absence of some calamitous event or material increase in mortgage financing costs, we expect this positive momentum to characterize 2014. In fact, we expect a market tipped decidedly in favour of sellers for the first half of the year, after which we project a shift to a more balanced market.”

“We predict continued upward pressure on home prices as we move towards the all-important spring market. In addition to normal demand, housing prices in Canada this year will be influenced by buyers who put off purchase plans in the very soft spring of 2013,” continued Soper. “Talk of a ‘soft landing’ for Canada’s real estate market in the new year is misguided.  We expect no landing, no slowdown, and no correction in the near-term. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”

Canada’s economy is expected to perk up in the year ahead, supported by increased business spending, improving employment and wage prospects, and a pick-up in exports propelled by a recovering U.S. economy and a lower Canadian dollar, among other factors.

“We believe aggressive government intervention, such as further restrictions on first-time buyer’s access to insured mortgage financing, or significant increases in interest rates, is unlikely to occur in 2014,” said Soper. “Our forecast assumes a continuously improving economy, both at home and abroad.”

While most indicators point to a strengthening housing market, some optimism has been overshadowed by fears of instability in Canada’s real estate market resulting from high volumes of condominium projects in major Canadian cities.  In light of this growing discussion, Royal LePage released a report in December 2013 analyzing the sustainability of condominium markets in Montreal, Toronto and Vancouver.

The report found that while actual condominium production across these three cities currently exceeds estimated near-term consumer requirements, strong condo market activity has been generated by important fundamentals including low interest rates, strong job creation in central areas of cities, evolving consumer preferences and conditions that can make condo ownership an effective investment opportunity.  According to the report, this strong activity “is not sufficient evidence of a housing bubble,” but rather the result of positive economic forces and changes in demand patterns supportive of condominium living.

 

Regional Market Summaries

Despite a swelling of inventory at year’s end, the Halifax housing market made strong gains in 2013. Standard two-storey homes saw the largest year-over-year gain, with the average price increasing 4.8 per cent to $329,633. At the same time condominiums increased 2.9 per cent and detached bungalows increased 2.4 per cent. Average Halifax house prices are forecast to increase by 1.1 per cent in 2014.

St. John’s housing prices shot up again in the fourth quarter, with all three housing types experiencing 9.0 per cent or greater year-over-year growth. An increase in the supply of homes available for sale in that market point to more moderate price appreciation in 2014.

The price for standard two-storey homes in Montreal increased markedly in the fourth quarter, increasing by 5.8 per cent to $401,714. Other housing categories were more balanced, with detached bungalows rising by 2.9 per cent and standard condominiums declining a modest 0.4 per cent.  Average housing prices in Montreal are forecast to increase by 1.4 per cent in 2014, partially because of an expected decline in unit sales.

Prices for detached homes in Ottawa increased slightly on a year-over-year basis, with the average price for standard two-storey homes increasing 2.2 per cent to $397,667 and detached bungalows increasing 2.4 per cent to $395,167.  Condominiums saw a slight depreciation in prices in reaction to a surge in available units. Average home prices in this region are expected to see mild growth of 1.6 per cent in 2014.

A supply shortage of detached homes in Toronto led to steady increases in the average price for these types of properties, with standard two-storey homes increasing 2.7 per cent to $686,250 and detached bungalows increasing 3.9 per cent to $580,151. Over the same timeframe standard condominium prices were up slightly, increasing by 1.0 per cent to $360,272. Toronto home prices are expected to grow by 3.9 per cent in 2014, while unit sales are projected to increase by 0.9 per cent.

The Winnipeg housing market witnessed mixed results in the fourth quarter, with condominiums experiencing a significant 7.2 per cent year-over-year price increase based on a surge in demand for this housing type. Standard two-storey homes showed more modest growth increasing 2.0 per cent, while detached bungalows were down slightly with a 0.1 per cent decrease. The average price of a home in Winnipeg is forecast to rise by 2.0 per cent year-over-year in 2014.

A surge in supply of homes available and prudent buyers in Regina led to modest price depreciation for detached homes in the area. Standard two-storey homes dropped 3.2 per cent year-over-year to $370,250 while bungalows declined 0.5 per cent to $331,500. At the same time standard condominiums posted a slight increase of 0.6 per cent. The city’s residential real estate market is expected to bounce back in 2014, with average prices projected to increase by 2.5 per cent.

The Calgary market saw strong year-over-year price appreciation across all housing types as inventory shortages continued. Average prices for detached bungalows increased 6.4 per cent year-over-year to $468,967 and standard two-storey homes increased 6.1 per cent to $461,089, while condominiums rose 7.0 per cent to $269,778. With continued supply scarcity expected in the year ahead, average prices for homes are predicted to increase by 5.1 per cent.

In the balanced Edmonton market, detached bungalows rose 3.7 per cent year-over-year to $344,626 while standard two-storey homes posted a modest increase of 1.9 per cent to $363,075. In the same period, condominiums increased by 2.2 per cent to $207,270. Looking ahead to 2014, average house prices are expected to rise by 3.0 per cent.

Confidence crept back into the Vancouver market, with prices for all housing types seeing moderate growth. The average price for detached bungalows increased 4.0 per cent year-over-year to $1,041,300 and standard two-storey homes increased 3.3 per cent to $1,139,050, while condominiums rose 2.3 per cent to $492,500. The momentum of the real estate market is expected to carry over into the New Year, with prices projected to rise 4.4 per cent in 2014.

Royal LePage’s quarterly House Price Survey shows the annual change of prices for key housing segments in select national markets.

Click here to view the chart

Royal LePage 2014 Market Survey Forecast

Royal LePage Q4 2013 House Price Survey – Data Chart

 

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 fourth quarter of 2013. A printable version of the fourth quarter 2013 survey will be available online on February 6, 2014. 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 nearly 15,000 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 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


Reports

During the process of buying or selling a home, you'll unearth countless questions. I know how difficult it can be to sift through all the details in order to find answers relevant and meaningful to you. I've put together the following series of reports that provide clear, concise and useful information on a wide range of issues related to real estate. Here you'll find tips on how to save money, real estate insider secrets, renovation advice, and much more.

 

I'd be happy to personally answer any other questions you may have. Remember, I will be here to assist you every step of the way!

  8 Mistakes to Avoid When Buying a Home

You've been saving for awhile, weighing your options, looking around casually. Now you've finally decided to do it - you're ready to buy a house. The process of buying a new home can be incredibly exciting, yet stressful, all at once. Where do you start?

  Benefits of Using a Realtor to Sell your Home

Selling your home is a complex process that can be stressful and time-consuming. An experienced Realtor has the knowledge, skills, and connections to help you through the process every step of the way.

  The Best Asking Price for your Home

Setting a realistic price for your home that reflects current market values will help sell your home quickly and for top dollar. When you price your home properly, you increase the chances that the offer you receive will nearly match your asking price, and that there will be competing offers - which may net you even more in the long run.

  Buy or Sell First?

If you are considering looking for a new house, and are a current home-owner, then chances are you're wondering what your strategy should be: do you wait to find the perfect new home before you put your current home on the market, or do you sell first and then look around? You have a few options. Use the following as a guide to explore what might be the best move for you.

  "Drive-Up Appeal": Get your Property Ready to Show

When preparing your property to show, work your way from the outside in. It is essential that your home possess a certain "drive-up appeal". Remember, a potential buyer's first impression of your house is formed while s/he is still sitting in the realtor's car. So, first you need to view your house from this perspective. Go stand on the opposite curb and observe your property. Compare it to surrounding properties.

  Buying a Home: What Expenses to Expect

Budgeting for a new home can be tricky. Not only are there mortgage installments and the down payment to consider, there are a host of other - sometimes unexpected - expenses to add to the equation. The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.

  Hire the Right Agent, For the Right Reasons: 8 Questions to Ask

Finding a real estate agent who is right for you requires doing a little homework, and asking the right questions. Choosing an agent is a decision that could ultimately cost or save you thousands of dollars. Keep in mind the individual you choose will be handling almost every maneuver in the biggest financial investment of your life. Experience, interests, and expertise vary from agent to agent, so you should be asking very specific questions in order to align your own needs with the abilities of an appropriate representative

  Home Inspections: Top Ten Problems

Each homebuyer has different ideas of what will constitute the ideal home for them, these notions often based on particular aesthetic preferences. But one thing that unites all potential homebuyers is the desire to find a home that is fundamentally sound - in areas beyond the immediate sweep of the eye - and that will provide a safe, comfortable, and efficient foundation for their life behind a new door.

  How to Get Top Dollar for your Home, Fast!

Your home is likely your largest asset, so selling it may be the biggest financial move you've ever made, one that requires significant thought and strategy. However, once you've entered the market, the process may move very quickly: your property has the best chance to sell within its first seven weeks on the market. Studies indicate that the longer a property stays on the market, the less it will ultimately sell for. So, you need to ensure you're ahead of the game. Get your property into top selling shape before it hits the market in order to increase its chances of selling within the desired window of time and drawing top dollar.

  How to Set an Offer Price

There is no set equation to determine how you'll reach an offer price. Rather, the process involves a range of research and comparison that will vary with each situation. You'll need to look at sales of comparable properties, and factor in additional data such as the condition of the property, the current market, and seller circumstances. With this information in hand, you will be able to determine a fair price range and, from there, establish the price you're willing to offer.

  Know the Market before You Buy

The asking prices of most homes on the market indicate the current state of the market, and usually mirror the prices for which other similar homes in the area have recently sold. In deciding upon a selling price, a home-seller must establish a balance between the desire to draw the highest offer and finding a price that will be reasonable enough to attract an appropriate pool of prospects, and competitive offers. While most selling agents counsel their clients to consider this equation when pricing their home, keep in mind that some homes are not properly priced.

  7 Things to Look for in a New Neighbourhood

Whether seeking solace, activity, schools, churches, or green space, every homebuyer looks for a different combination of attributes in a new community. Choosing a neighbourhood that suits your needs and wants is one of the most important decisions you'll make in the home-buying process; your choice of environment will affect the way you experience your new home.

  A Manual to Prepare your Home for Selling

"You never get a second chance at a first impression." We've all heard this expression before. And now, while you are preparing your house to sell, it should not be far from your mind.

  Prepare the Inside of your House for Showing

Once you've minimized the clutter in your home, clearing out excess items and furniture, you'll be ready to concentrate on repairs, cleaning, and decoration. Your goal is to get each room looking its sharpest and most fresh - the better your house looks, the greater your chances that it will sell quickly and for top dollar. Concentrate on the following areas to get your home into selling shape.

  Second Time's a Charm!: Sell the House that Didn't Sell

Don't get discouraged if your property hasn't sold during its first appearance on the market. Your home may actually have been one of the most appealing listings of its kind - and the reasons it didn't sell may have nothing to do with the property itself or the market. Rather, a number of separate factors may have influenced the outcome. Take a step back, break your original selling method into parts, and allow yourself time to evaluate each one. Make a commitment. Establish a new approach. Stick to it. A reassessment of your system, and a shift in perspective, may be just what you need to realize your ultimate goals in the sale of your home.

  Showtime: Tips for Showing your Home

After putting in a huge amount of time and effort to get your home looking good and ready to sell, your hard work is finally going to pay off: your home is on the market - you're ready to begin showing. Your house should always be at-the-ready for a tour, as agents may bring clients by with very little notice. If they catch you unprepared and you aren't able to show the house on the spot, you could be losing out on a sale.

  Stop Paying Your Landlord!: Own Your Own Home

The thousands of dollars in rent you've already paid to your landlord may be a staggering figure - one you don't even want to think about. Buying a house just isn't possible for you right now. And it isn't in your financial cards for the foreseeable future. Or is it? The situation is common and widespread: countless people feel trapped in home rental, pouring thousands of dollars into a place that will never be their own - yet they think they're unable to produce a down payment for a home in order to escape this rental cycle. However, putting the buying process into motion isn't nearly as impossible as it may seem. No matter how dire you believe your financial situation to be, there are several little-known facts that may be key to helping you step from a renter’s rut to home-owning paradise!

  Tips for the Moving Process

It's official: you've signed the papers, dotted all the i's and crossed the t's - you own a new home! You've almost reached the end of your journey. However, now, faced with the daunting task of moving, it may seem as though the journey has just begun. Moving can be a time-consuming and stressful experience if you let yourself be overwhelmed by the job. Remember, though, having a successful move means taking care of the details, one by one. If you break the process down into steps and arrange your time accordingly, you can make it manageable.

  Top Legal Mistakes to Avoid

The process of buying or selling a house seems to involve a million details. It is important that you educate yourself on as many parts of this process as you can - this knowledge could mean the difference of thousands of dollars in the long-run. The legal issues involved in the process are often particularly intricate, ranging from matters of common knowledge to subtle details that might escape the untrained eye. Any of these issues, if not handled properly, could develop into larger problems

  Where to Start: Begin to Prepare your Home for Showing

"You never get a second chance at a first impression." We've all heard this expression before. And now, while you are preparing your house to sell, it should not be far from your mind.

NOTE: MLS® property information is provided under copyright© by the Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification. This website may only be used by consumers for the purpose of locating and purchasing real estate.