Royal LePage, which franchises brokerages across the country, predicted the national average price for resale homes will increase this year by 2.8 per cent by the end of the year. It said the national average price for a standard two-storey home was $375,427 in the fourth quarter of 2011, up 4.2 per cent from 2010.
“Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace,” said Phil Soper, the president and CEO of Royal LePage Real Estate Services.
National averages don’t tell the whole story, however, since there are wide variations depending on the type of home and location.
In Vancouver, a standard two-storey home had an average price of $1.1 million in the fourth quarter of 2012. By contrast, two-storey homes in Atlantic Canada had an average price of $200,000 or less in several cities.
In Toronto, which is usually the country’s second-most expensive real-estate market after Vancouver, LePage found strong price gains for most housing types in the fourth quarter — due to a lack of available properties and steady demand.
In 2012, Royal LePage expects that real estate values in Toronto will increase 2.6 per cent compared to 2011 — slightly slower than the national growth rate.
In the fourth quarter, the average price for detached bungalows rose 7.2 per cent from a year earlier to $532,137; prices for standard two-storey homes rose 4.2 per cent to $629,188 and standard condos rose 3.4 per cent to $347,659.
Some economists have said housing prices in certain Canadian markets, including the Toronto area, may be too high to be sustainable and are due for a correction.
However LePage said housing prices have been high in Toronto because demand has outstripped supply.
“Inventory has been a challenge for Toronto’s potential buyers throughout 2011 and this restricted supply has put upward pressure on prices,” said Gino Romanese, senior vice-president for Royal LePage Real Estate Services Ltd.
“Standard condominiums in the resale market saw a more modest increase due to a healthier supply that was created by newer units coming online. However, demand for older units has increased as they are generally larger in size and preferable to (people downsizing from houses) who are used to more space.”
In Victoria and Saint John, N.B., house prices were flat or slightly down in the fourth quarter, compared with the same period of 2010.
In Saint John, detached bungalows fell 2.2 per cent year-over-year to $179,946, while standard two-storey properties slipped 0.3 per cent to $298,076. Condos were the exception, with average prices climbing 16.1 per cent year-over-year to $159,370, although LePage said those increases weren’t typical.
In Victoria, standard two-storey homes were unchanged, with prices remaining at $480,000 while detached bungalows slipped 0.8 per cent to $486,000 and condos dropping 1.1 per cent to $282,000