Canadian Real Estate Pricing Growth to Slow in 2013
Royal LePage announced today its findings based on its House Price Survey and Market Survey Forecast of the Canadian real estate market. In the Q4 of 2012, Canadian real estate saw the average price of a home increase 2 to 4 per cent in comparison to 2011.
Due to this increase, home sales in Canada are expected to become stagnant in the first half of 2013, thus affecting the growth of home prices nationally. Royal Le Page estimates that by the end of 2013, home prices will have increased just slightly, up 1 per cent.
Canadian realty in the latter half of 2012 saw real estate value hold firm, with some consumers avoiding selling their homes due to the uncertain economy. In the fourth quarter of 2012, two-storey homes saw an increase in value of 4 per cent reaching an average of $390,444 while detached bungalows increased 3.6 per cent to $356,790.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage. “Our sturdy domestic economy and encouraging employment trends have emboldened sellers, and some have opted to let market conditions adjust before listing. Simply put, fewer home owners listed their properties in the second half of the year, which kept inventory levels lower, and supported home values.”
The slowdown of home sales, reports Royal LePage, is expected mainly in the first half of 2013, with sales improving in the third quarter and continuing through the fourth.
“Canada is a realm of sizable, fairly independent regional economies. Some housing markets, such as those in Alberta and Saskatchewan, are poised to expand significantly in 2013. We will see a decline in unit sales and a flattening of home prices in our largest urban markets of Vancouver and Toronto and that will have a significant dampening effect on reported national averages,” said Soper.