Royal LePage Real Estate Services has released its Second Quarter House Price Survey and Market Survey Forecast, finding that the average home price across Canada increased between 1.2 per cent and 2.7 per cent during the second quarter of 2013.
“As we have stated consistently since the current market downturn began late in the second quarter of 2012, this is a normal cyclical correction which brings fewer home sales and softer prices,” said the president and chief executive of Royal LePage. “Those hoping their predictions of a bursting bubble and cataclysmic drops in home values will come true are out of luck again. Price appreciation in most markets across the country has been well below the long-term average for Canada and will remain so through to the end of the year. We expect to see the number of homes trading hands to begin to rise slightly on a year-over-year basis in the second half of 2013, with price softness continuing until mid-2014, at which point we’ll see an emergence from the current cycle.”
The average selling price in Canada for two-storey homes is $419,614, while the average selling price for bungalows is now $386,547. Condos saw a smaller increase to an average of $248,750.
Overall, Royal LePage predicts a 3 per cent price increase for the entire year over last year.
Soper continued, “With the economy on both sides of the border performing better in recent months, a move off the record-low interest rates that we’ve experienced over the past few years is likely on the horizon. Paradoxically, we expect the first increases in interest rates to be constructive for the housing market. Rising rates would be driven by a strengthening economy, reduced unemployment and improving consumer confidence. Much of the dampening effect that would come with a transition towards higher rates has already been ‘priced in’ to both consumer attitudes and financial institutions’ current lending policies.”
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