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Real Estate Update

Royal LePage House Price Survey - First Quarter April 2009


Only modest house price declines despite predictions of double digit depreciation

Consistent with current economic trends, Canadian residential real estate prices declined during the first quarter, according to a quarterly House Price Survey released today by Royal LePage Real Estate Services Ltd.  As the market correction unfolds, year-over-year home prices were lower, as was expected. Increased buyer activity at the end of March suggests that spring will bring its typical increase in unit sales activity as buyers target summer moves.

Regional disparities in quarterly housing prices showed markets in Atlantic Canada outperforming other areas of the country as hardy local economies spurred house price growth across the three housing types surveyed.  Markets in central Quebec and eastern Ontario held steady with areas of modest growth and limited declines. In the balance of Ontario, and in particular the Greater Toronto Area, prices retreated from the record levels set in the first quarter of 2008, with most trading areas showing mid to low single digit declines.  With the exception of Manitoba, western provinces saw significant changes as the rapid run-up in prices experienced earlier in the decade gave way to double-digit declines in most regions.  As market corrections in B.C. and Alberta were underway well ahead of the full impact of the current economic crisis, it is suggested that these areas may be first in Canada to stabilize.

 “We expected a sharper decline in house prices across Canadian markets during the first quarter,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services Ltd.  With economic hardship dominating our global consciousness, it was predictable that dwindling consumer confidence would continue to drive prices lower.  But markets were relatively resilient during the period. Soper continued, “Canadians in most regions should not expect the prices of their homes to begin appreciating again until the overall economy begins to stabilize, likely in the first half of 2010.”

The report shows that the average price of a two storey home in Canada declined 6.5 per cent to $379,636 compared to the same quarter last year.  In Vancouver, the average price declined 12.6 per cent year-over-year to $828,750 while in St. John’s prices climbed 15.6 per cent to $265,000.  With consumer confidence bolstered following investments by Vale Inco NL and Hebron, Soper commented: “Using house price change as a gauge, Newfoundland is Canada’s sole remaining seller’s market."

Moderate growth occurred for detached bungalows in Montreal (up 2 per cent) and Ottawa (up 1.9 per cent), while Toronto saw a decline of 6.3 per cent compared to the same period in 2008.  Prices in the prairies and in western cities declined with the average price for a detached bungalow down 8.1 per cent in Saskatoon and 11.2 per cent in Edmonton.

The nation’s condominium market waned with the average price of a standard unit dropping 4 per cent to $232,877 compared to $241,152 in the first quarter of 2008.  Calgary saw a 12.8 per cent drop in average price of condominiums, but declines were less severe in Vancouver (down 5.3 per cent) and in Toronto (down 3.1 per cent).  “Condominiums are generally the most affordable housing option, especially in urban centres,” Soper said.  “With record low lending rates and new government initiatives aimed at encouraging first-time buyers to enter the market, ownership at the entry level is becoming increasingly accessible.”

Noting recent global efforts to address the economic crisis, including the coordinated response from the world’s leading economies coming out of the G20 meeting and stimulus package announcements at home and in the United States, as well as what appears to be the beginning of equity market recovery, Soper commented, “These glimmers of economic hope are coinciding with a time of year that typically brings renewed interest in the housing market.  Traditional spring trends – increases in open house attendance, calls to brokers and viewing appointments – tell us that potential buyers are stepping off the sidelines and an increase in purchase activity is likely to follow.”

Royal LePage’s quarterly House Price Survey shows the following annual change of prices for key housing segments in select national markets.  Please click on the link below to open the House Price Survey.

Royal LePage Quarterly House Price Survey April 2009.pdf

In Victoria between January - March 2009 the average price of a Detached Bungalow was $453,000. (3.2% change from 2008)

A standard two-storey home during the first quarter of 2009 was $435,000. (-5.4% from 2008 year's first quarter)

A standard condominium was priced at $260,000. (-11.6% from 2008 first quarter)


Map of British Columbia showing Victoria