In the never-ending real estate “bubble” debate, our brokerage Royal LePage is the latest to weigh in with the issuing of it’s quarterly House Price Survey yesterday.
Its prediction? No bubble.
“Widespread calls for a major real estate correction in 2012 simply can’t be justified,” Royal LePage chief executive Phil Soper said in a statement Thursday. “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.”
Just two days earlier, a Toronto banking conference heard the Canadian market is overheated, with Bank of Montreal CEO William Downe noting that “warning signs” are emerging in two hottest condominium markets: Vancouver and Toronto.
Rather than a crash, however, Royal LePage predicts rising property values in all major markets.
The company’s forecast called for prices across to country to rise 2.8 per cent by the end of 2012, after stronger gains last year.
It said in the fourth quarter of 2011, the average price of a standard two-storey home was $375,427, up 4.2 per cent from a year earlier. The average rate of a detached bungalow was up 6.1 per cent to $344,392, while condominiums gained 3.6 per cent to $234,680.
Statistics Canada reported Thursday that its new housing price index rose 0.3 per cent in November, following on a 0.2 per cent increase in October, and was up 2.5 per cent year-over-year.
Price increases in Toronto, Oshawa and Montreal offset declines in Calgary, Vancouver and the Ontario metropolitan regions of Sudbury and Thunder Bay, the agency said. Builders in all four areas reported lowering prices in order to stimulate sales and remain competitive, while price increases elsewhere were attributed to higher material and labour costs.
The Canada Mortgage and Housing Corp. has forecast the average price of a listed homes for resale to be $363,900 this year, up 1.2 per cent from 2011.
The Canadian Real Estate Association predicted that the average price would be relatively flat at $362,700. Both forecasts were made in November.
Royal LePage said even pricey housing markets in Vancouver and Toronto – where standard two-storey homes averaged $1.1 million and $629,188, respectively, in the last quarter – will see continued price appreciation in 2012.
The main text of this post is from an article in the Ottawa Citizen