House prices remained relatively flat in the first quarter of 2013 compared to a year earlier, with increases across the country averaging between 1.2 per cent and 2.4 per cent, according to a new survey released Thursday.
In the first quarter, the national average price of a standard two-storey home increased 2.2 per cent, compared to the previous year, says Royal LePage, in its House Price Survey. The national average price of a detached bungalow increased 2.4 per cent and the average price of a standard condominium increased 1.2 per cent.
“2013 finds the Canadian housing industry in a highly unusual place,” said Phil Soper, Royal LePage president and chief executive. “The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we’ve seen before.
“Typically one of these variables is moving hard in an opposite direction, said Soper.”While some have spoken loudly about impending market volatility and dramatic downward pressure on home prices, we are simply not seeing evidence of this.”
In fact, Royal LePage argues that the current environment is very supportive for housing, and those waiting for big declines in home prices will likely be disappointed. Soper said price support could come from gains in employment, an improving U.S. economy, expected growth in Chinese resource consumption and the Bank of Canada’s expressed stance about keep interest rates low for the near- and mid-term.
However, he added, “there is some degree of uncertainty regarding the of length time these factors will remain in place.”
Among regional highlights for the first quarter:
• In Winnipeg, detached bungalows posted the largest increase of 6.9% to $302,896. Multiple offer and bidding war situations remain prevalent, with 35% of listings selling above asking price.
• With inventory yet to catch up to an influx of first-time buyers, Regina continued to see strong increases. Standard two-storey homes saw the highest gains, rising 12.7% to an average price of $337,000.
• Low inventory also put upward pressure on Calgary prices, with increases of 5.1-6.8% for housing types surveyed. Although they experienced the smallest price increase, standard condominiums were the most active housing category in the first quarter of 2013. In contrast, Edmonton prices remained relatively flat with price changes ranging from a decrease of 0.2% to an increase of 1.7%.
• Vancouver posted year-over-year decreases of 5.1-5.6% across housing types. The market witnessed an overall reduction in activity from both buyers and sellers.
• Halifax continued to experience consistent growth, with prices increases across housing types surveyed. Detached bungalows made the highest leap, increasing 7.8% year-over-year to $294,667.
• St. John’s witnessed some of the highest average gains in Canada, with two-storey homes rising 10.6%. This was due in large part to an upswing in activity by move-up and executive buyers purchasing higher priced homes.
• Montreal prices remained relatively flat. Standard two-storey homes saw the largest increase of 1.4% to an average of $392,929, while standard condos experienced the smallest rise of 0.4% to $240,044.
• Ottawa’s market remained relatively flat, with gains ranging from 0.8-1.9%. While standard condos saw the largest price gains, unit inventory for this category shot up 41% year on year.
• Toronto posted moderate growth in the first quarter, with average price gains of 1.8-4.0% for housing types surveyed. The quarter saw a slight decrease in volume, even among first-time home buyers, who are traditionally the most active group. Multiple offer situations and bidding wars were still taking place in some areas of the city.