Real estate agency Royal LePage is expecting Canada’s housing market to shift in favour of sellers in the first half of this year, and is forecasting a strong spring.
The agency, which represents more than 15,000 Canadian real estate agents and is part of Brookfield Real Estate Services Inc., is also predicting that house prices will maintain their momentum.
“We predict continued upward pressure on home prices as we move towards the all-important spring market,” Royal LePage CEO Phil Soper stated in a press release.
“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. 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.”
Many economists have been surprised by the buoyancy of home prices in the wake of the lengthy sales slump that persisted in the market from the summer of 2012 to this past spring.
Economists both in Canada and abroad are keeping a close eye on Canadian home prices as they debate just how overvalued the market is. While many Canadian economists estimate that home prices here are in the neighbourhood of 10 to 20 per cent too high, economists at Deutsche Bank recently said they believe prices are 60 per cent too high.
The Calgary Real Estate Board recently said that the benchmark price of a single family home in the Calgary area is now $472,200, up 8.6 per cent from a year earlier. The benchmark in Vancouver is $603,400, up 2.1 per cent from a year earlier despite that city registering the steepest market correction in the past two years.
The average price of homes that sold over the Multiple Listing Service in the Toronto area last month was $520,398, up by 8.9 per cent from the average selling price in December, 2012. The average selling price in Toronto for all of 2013 was $523,036, up 5.2 per cent from the average in 2012.
The Canadian Real Estate Association (CREA), which represents the bulk of real estate agents in Canada, said in December that it is now expecting the average price of homes sold over the Multiple Listing Service to have risen by 5.2 per cent in 2013, to $382,200 (the final numbers will come out later this month). Heading into 2013 it had been expecting the average price to rise by just 0.3 per cent.
CREA is now expecting average prices to rise by 2.3 per cent this year, while Royal LePage is calling for a 3.7 per cent increase.
Royal LePage says that, based on a survey it conducts, the average price of a standard two-storey home rose 3.6 per cent in the fourth quarter of 2013 to $418,282, the average price of a detached bungalow rose 3.8 per cent to $380,710, and the average price of a standard condominium rose 1.2 per cent to $246,530.
The numbers vary widely across the country, for instance Royal LePage says condo prices in Calgary rose 7 per cent while those in Montreal fell by 0.4 per cent.
Source - http://www.theglobeandmail.com article January 9, 2014