Royal LePage forecasts steady price gains for the full year, inventory shortages in large cities continue
TORONTO, July 9, 2014 – With the harsh winter now a fading memory, the average price of a home in Canada increased between 3.9 and 5.2 per cent in the second quarter of 2014. Prices are expected to increase steadily for the balance of the year, according to the Royal LePage House Price Survey and Market Survey Forecast released today.
According to the survey, price increases were posted across housing types, with detached bungalows seeing the highest year-over-year gains, rising 5.2 per cent to an average price of $406,454. Meanwhile, standard two-storey homes rose 5.1 per cent year-over-year to $440,972, while standard condominiums posted gains of 3.9 per cent to $258,501.
A closer look at Canada’s residential real estate market points to a tale of two city types, in which big city housing activity represents a small part of the picture but accounts for a large part of the gains in national average home prices. The shortage of detached single-family houses once again led to significant price growth in Toronto. In Calgary, new listings could not keep up with strong demand from a briskly expanding workforce, driving near double-digit price growth. Vancouver, which just last year was seeing year-over-year price declines, is now posting mid-single digit appreciation in the detached home categories, pushing regional price averages up to record heights. While the Montreal market recorded lower price gains than its large metropolitan counterparts, real estate demand experienced a renewed thrust following the provincial election in April with signs of a brighter market ahead for the sector.
In contrast, smaller city markets are seeing far more moderate house price gains. In Ontario, regions outside Toronto such as London posted year-over-year price increases of 2.2 and 2.0 per cent for detached bungalows and standard two-storey homes, respectively, while Ottawa remained relatively flat at 1.3 and 0.8 per cent in the same categories. In Edmonton, the price of a detached bungalow remained essentially flat, dropping 0.2 per cent year-over-year, while standard two-storey homes rose 3.8 per cent, compared to Calgary’s 9.7 and 7.9 per cent increases in the same categories. In British Columbia’s Okanagan region, Kelowna saw a 2.8 per cent rise in the price of detached bungalows compared to Vancouver’s 5.2 per cent rise in the same category.
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