In its most recent House Price Survey, Royal LePage said that the average price of a home in Canada increased by between 3.8 per cent and 6.6 per cent in the first quarter of 2015.
As a result, Royal LePage says that a soft landing is underway in most markets across Canada, as house prices increase slower than normal. However, in markets like Vancouver and Toronto, which are Canada’s two largest urban markets, there were much higher price increases.
“Canadian home buyers, with the last decade’s recession still top of mind, have been very sensitive to shifting, broad economic factors,” said the president and chief executive of Royal LePage, Phil Soper. “The oil shock has been unsettling fo the national economy, consumer confidence and by extension, the housing market. That said, lower prices at the pump and the confidence boosting move by the central bank to lower interest rates have been supportive. With these factors combined, we have a soft-landing for housing after several years of robust expansion. We define a soft landing as a market in which home prices are flat or increasing slightly, giving the economy and family incomes, a chance to catch up.”
He continued, “On balance, we believe we will not be seeing the kind of appreciation observed over the last three years any time soon, as markets work through the current cycle and a align with broader economic conditions. In terms of downside risk, we do not foresee a sharp decline in home prices, particularly in today’s low interest rate environment. “