Home prices to remain steady in second half of 2010
One of Canada's leading real-estate companies is forecasting that home prices will remain steady in the second half of 2010, although the number of sales is expected to fall compared with the hot activity early in the year.
Royal LePage Real Estate Services says some markets will see a decline in home prices and sales volumes towards the end of 2010 but they should be seen more as a reflection of the highs reached late last year rather than a major slowdown.
Prices for detached bungalows and two-storey houses were up about nine per cent in the April-June quarter, compared with the same time last year. Condominiums were up 7.3 per cent.
"An expected increase in the supply of homes on the market will now bring stabilization in prices and in some cities we will see both prices and unit sales decline towards the end of the year," says Phil Soper, the president and chief executive of Royal LePage Real Estate Services.
"This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year."
Royal LePage is forecasting that by the end of 2010, home price appreciation will average 6.8 per cent over last year, while the number of home sales will increase by just over one per cent compared to 2009.
Vancouver and Toronto, which are Canada's two biggest real-estate markets, showed some of the largest increases in the second quarter of 2010.
Average prices in Vancouver were up 16.6 to 19.1 per cent while prices in Toronto rose by an average of 7.7 to 11.4 per cent.
However St. John's had the country's biggest increase with prices up an average of 18.4 per cent to 9.6 per cent.
The Royal LePage house price survey and market survey forecast released today showed strong price appreciation across all housing types surveyed in St. John's.
"We've seen strong demand for homes in St. John's this year. Everything is selling and selling well," said Glenn Larkin of Royal LePage Professionals 2000 Ltd. "Similar to last quarter we are witnessing multiple offers across all segments, there are a lot of buyers competing for the same property. This is partly attributable to inventory levels being down this year, combined with the anticipation of interest rates going up, creating a lot of demand and driving up prices."
St. John's saw the strongest year-over-year house price appreciation in the country this quarter. The average price of detached bungalows in St. John's increased significantly, up 19.2 per cent over last year to $238,333, while the average price for standard condominiums rose 18.4 per cent to $255,000. The largest year-over-year average price gains in the area were made by standard two-storey homes rising 19.6 per cent to $330,000.
"We have had a very busy winter and spring market, driven by the anticipation of higher interest rates and the changes to the government regulation," said Larkin. Resale activity is up this quarter, seeing movement by first-time-buyers, executive home buyers and move-up buyers.