By: ROYAL LEPAGE


TORONTO, October 10, 2013 – According to the Royal LePage House Price Survey released today, the average price of a home in Canada increased between 1.2 per cent and 4.1 per cent in the third quarter of 2013.

 

The survey showed a year-over-year average price increase of 3.7 per cent to $418,686 for standard two-storey homes, while detached bungalows rose 4.1 per cent to $381,811. During the same period, the average price for standard condominiums saw a more moderate increase, rising 1.2 per cent to $246,530. Sales volumes surged in a number of regions, as Canadians re-entered the housing market after sitting on the sidelines for more than a year – marking the end of the most significant housing market correction  since the 2008-2009 global recession.

 

“Canada experienced a significant housing market correction over the last four quarters that most in the nation missed entirely,” said Phil Soper, president and chief executive of Royal LePage.  “Many regions experienced dramatic slowdowns in the number of homes trading hands, but news of double-digit unit sales declines went largely unnoticed, over-shadowed by a macabre fascination with the prospect of a U.S.-style home price collapse, which of course never transpired. Our over-heated real estate market of 2011 and early 2012 drove some to the sidelines. Home price appreciation ground to a halt for a year – a necessary breather and predictable market response.”

 

According to the Royal LePage survey, St. John’s, Toronto, Winnipeg, Saskatoon and Calgary led the country in home price increases, while Vancouver posted year-over-year price gains across all three housing categories.

 

“Our housing market turned a corner in the third quarter. Buyers returned to the streets in droves, resulting in a sharp increase in home sales.  In many cities, there simply weren’t enough properties on the market to satisfy demand, which put upward pressure on prices for the first time in 2013,” continued Soper. “We expect this positive momentum to continue through the all-important spring market of 2014, buoyed by a combination of pent-up demand, increasing consumer confidence and continued low interest rates.”

 

Last month, a number of prominent financial institutions upgraded their projections on Canada’s future gross domestic product (GDP) growth. TD Bank raised its outlook for Canadian GDP growth for the third quarter to an annual rate of 2.3 per cent, while maintaining its forecast that full-year growth will be 1.7 per cent in 2013 and 2.4 per cent in 2014. RBC posted slightly higher GDP growth numbers for this year and next of 1.8 and 2.8 per cent, respectively. In the same month Statistics Canada reported that Canada’s economy created 59,000 jobs in August, approximately triple what most economists had forecast.

 

“Job growth begets consumer confidence. An emboldened citizen is more likely to enter into a major financial transaction. Following almost six years of turbulent times, economic fundamentals are pointing to an era of renewed  prosperity. The American economy is on an upward trajectory and businesses in Canada and around the world are finally loosening purse strings and investing in people for growth. This is vitally important for an exporting nation like ours. And as goes the Canadian economy, so goes the residential real estate sector,” explained Soper.

 

“Emerging headwinds for Canada’s real estate market include the demographic trend of simply having fewer people of home-buying age than in the 2000s, but this will be offset by immigration and social change.  Baby Boomers are living longer than their parents, extending that generations period of active real estate participation.   At the other end of the scale, single people, and in particular single women, are buying homes earlier and at a faster rate than ever before.”

 

Soper concluded, “while interest rates must of course rise from current historical lows, we anticipate the change to be modest in the medium term. As the country emerges from this extended correctional cycle, we believe the real estate market stimulus previously provided by low interest rates will be replaced by a strengthening labour market and true economic recovery.”

 

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May 16, 2013
By: Royal lePage


Consumers maintain optimism regarding Canadian recreational property market, according to Royal LePage survey


TORONTO, MAY 16 - According to a new survey released today by Royal LePage, interest rates factor hugely into the decisions of Canadian households when it comes to purchasing a recreational property.

 

The survey, which polled Canadians across the country who either currently own or intend to purchase a recreational property within the next five years, found that most (82 per cent) Canadians say interest rates will influence their decision to purchase a recreational property – and a majority (58 per cent) feel added urgency to buy a recreational property while interest rates are low.

 

Survey respondents demonstrated overall optimism regarding the Canadian recreational property market. When asked what they believe recreational property prices will do in the coming year, half (50 per cent) of respondents indicated that prices will increase and one-third (32 per cent) said they will stay the same. And of those planning to purchase a recreational property within the next five years, 76 per cent said they are more inclined to buy a property in Canada than in the U.S. or elsewhere.

 

“Despite financial and economic uncertainty, or perhaps because of it, we have found that the enduring value of recreational properties is widely-recognized by Canadians,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “In contrast to our large urban centres, where home prices shot up in recent years before rapidly cooling in 2013, the recreational property market has remained remarkably stable and resilient.”

 

Soper continued, “I shy away from recommending real estate as an investment for the typical family. Shelter is, after all, primarily consumption. However in Canada today, where we see virtually no return on bonds and other forms of modest risk savings, it is reasonable to view recreational property in a new light. This prolonged low-interest environment supports purchase decisions based upon lifestyle and supported with a sound investment thesis.”

 

According to the survey, the majority of current recreational property owners plan to keep their properties long-term, with 60 per cent stating that they are somewhat or very unlikely to sell their property upon retirement. At the same time, almost two-thirds (64 per cent) are not planning to use their recreational home as their primary residence upon retirement. For those planning to purchase a recreational property for retirement, financial feasibility is among the most important factors they are looking for, with affordable purchase price (56 per cent) and reasonable maintenance costs (39 per cent) topping the list. Waterfront access (37 per cent), proximity to town (33 per cent) accessible medical facilities (26 per cent) and proximity to their primary residence (22 per cent) were also cited as important property attributes. 


Properties on a lake are by far the leading property type, with almost half (41 per cent) of those planning to buy indicating that this is their first choice, followed by a property in the mountains or woods (17 per cent) and a condominium in a recreational community (13 per cent). When asked what financial and/or lifestyle changes they would be willing make in order to purchase their dream recreational property, almost one-third (31 per cent) said they would rent their property out during the year. Other strategies include reduce discretionary spending (25 percent), downsize primary residence (24 per cent), purchase a fixer-upper (23 per cent) and purchase with friends/family (22 per cent).

 

“Canadians have long valued the ability to escape the city to spend time with friends and family,” said Soper. “A place to get away from the pressures of daily life seems to be more attractive now than ever. From coast to coast, Canada offers some of the world’s most spectacular landscapes and friendly communities.”

The survey was commissioned as part of the 2013 Royal LePage Recreational Property Report, an annual market analysis of recreational property prices, trends and activity in selected leisure markets across the country.

 

The chart below shows the typical price range for standard waterfront, land-access properties across Canada in 2013.

2013 Recreational Property Price Summary
Average Price Range by Province

For Standard Waterfront, Land Access Cottage

1,000 sq feet, 3 bedrooms, 100 foot lot

PROVINCE

AVERAGE PRICE RANGE 2013

Prince Edward Island

$120,000 – $300,000

Newfoundland

$150,000

New Brunswick

$175,000 – $180,000

Nova Scotia

$180,000

Quebec

$125,000 – $1,000,000

Ontario

$75,000 – $625,000

Manitoba

$300,000 – $370,000

Saskatchewan

$250,000 – $800,000

Alberta

$110,000 – $650,000

British Columbia

$290,000 – $2,000,000

NATIONAL AVERAGE

$177,500 – $625,500


Methodology
The survey was completed online from April 30 to May 9 using Leger Marketing’s online panel, LegerWeb, with a sample of 1,002 Canadians who currently own a recreational property or are looking to purchase a recreational property within the next five years.

A probability sample of the same size would yield a margin of error of ±3.1%, 19 times out of 20.

 

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Published: Tuesday, 29 Oct 2013
By Reuters

 

U.S. single-family home prices rose in August and also posted their strongest annual gain in more than seven years, a closely watched survey showed on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9 percent on a seasonally adjusted basis, beating economists' expectation of a 0.6 percent gain. Prices rose 0.6 percent in July. On a non-adjusted basis, prices rose 1.3 percent.

 

Compared to a year earlier, prices were up 12.8 percent, beating economists' expectations of 12.5 percent and marking the strongest gain since February 2006, when the increase was 13.8 percent. The August price gains came despite a rise that month in 30-year mortgage rates that slowed mortgage applications and refinancing activity.

 

The report suggested the housing sector continued to recover despite those headwinds. Home prices have been rising nationally since early 2012 and economists have singled out housing as one of the bright spots of the U.S. recovery. Prices in all 20 cities rose on a non-seasonally adjusted yearly basis, led by a 29.2 percent gain in Las Vegas and followed by a 25.4 percent increase in San Francisco.

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