St. John's area had country's highest house-price increases in second quarter 2010: Royal LePage

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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.

Organizations: Royal LePage

Geographic location: St. John's, Canada, Vancouver Toronto

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  • Tom
    July 20, 2010 - 13:03

    People can only afford these homes because they are using 35 year ammortizations. The government used to only allow 25 years. Then, they allowed 30,35 and 40 year terms, meaning you could afford a larger house. The government removed the 40 year over fears of a housing bubble but it was too late. Do you want to go into retirment, owing on a mortgage? Consider this, a $300,000 house, will cost you at least $600,000 when all is said and done (interest). So, your home price doubles over that time. Did you make any money? No. And don't forget, you never get property taxes, etc back. Houses are not an investment, and if they are, a very illiquid one and you have all your eggs in one basket! Good luck.

  • IMakelessthan75k
    July 20, 2010 - 13:02

    Get a clue calvin, I make just over 35k a year and just got approved for a 215k mortgage. If your too stund to figure mortgages out maybe its best you dont get one.

  • Merin
    July 20, 2010 - 13:02

    The real concern is what will happen to those people buying a house for $300,000 at 3.5% mortgage rate. When the rates go up, there are going to be a lot of people unable to pay their mortgages.

  • Newfie Guy
    July 20, 2010 - 13:02

    That's great news. Now if people paid more then $10 an hr which it seems the majority of people pay then people could afford to live in a decent house. Seriously, there's no need for these prices. It's not a positive thing for these price increases. It's more negative then anything.

  • Noone
    July 20, 2010 - 13:02

    Newfie guy price is determined by demand. If no one was buying houses then the pices wouldn't be as crazy as they are. So people must bel able to afford it in the city if they are buying them!

    And secondly less then 11% of the population in NL are working for minimum wage based on the latest data from Stats Can. So the majority of people HAVE to be payin more then $10.00 an hour

    Maybe its time to stop complaining and go find a real job eh?

  • Calvin
    July 20, 2010 - 13:02

    When it falls, its gonna fall hard, and all these $300 000 homes will be going for $180 000. Then some of us living below the $75 000 a year income mark will be allowed to buy a home. Get a clue As a result , what in the name of St. Peter do you think Danny Williams has to do with the cost of housing in this province? How do you explain the increase in housing costs in Corner Brook, Clarenville and Gander? They are not a a part of, as you called it, Kingdon of Danny, but house prices are increasing in those areas as well.

  • As a result
    July 20, 2010 - 13:02

    In the Kingdom of Danny commonly called St Johns all is well and the rich get richer therefore everyone is happy and King Danny stays as popular as ever. Outsdide the Kingdom of Danny however its a different story. That story dosent make King Danny look good so we wont talk about that.

  • John
    July 20, 2010 - 13:02

    Yeah, it would be much more positive if the prices were constantly going down, like they were when the Liberals were in power. Yep, everyone wants to see the biggest investment they own go down in price. The Williams gov. continues to invest hundreds and hundreds of millions into rural NL with little to no return. Millions into the fishery, millions into the paper industry, millions into agriculture, but that's never enough for the whiners. We get a little good news here, that our mortgages are not going bottom up, like in the US, and the Danny bashers are quick to cast it in a bad light. yep, can't wait to go back to the days when the Liberals were in power, house prices lowest in the country, minimum wage at 5 dollars an hour and 90, 000 people left the province. Give me a break.

  • Phoebe Tilley
    July 20, 2010 - 13:02

    John Smith must be Bones with yet another name. They both equally praise and worship theit idol Danny. I bet Danny makes the sun shine as well John. All the rain is the fault of the big bad Liberals. Get a friggin life John. PLEASE,