Royal LePage released its Quarterly House Price Survey and Market Survey Forecast this morning, projecting that home prices across the country will increase steadily for the remainder of 2014. In the second quarter of this year, home prices increased between 3.9% and 5.2%, with increases posted across various property types. Detached bungalows saw the highest year-over-year increases, rising 5.2% to $406,454, while two-storey homes increased 5.1% year-over-year to $440,972. The average price for standard condominiums rose 3.9% this year to $258,501.
Residential Real Estate Market a “Tale of Two Cities”
Canada’s residential real estate market is described in the report as “a tale of two city types,” as housing activity in the nation’s largest cities actually represents a small part of the overall picture, but accounts for a large part of the gains in average home prices across the country. On the other hand, smaller Canadian cities are seeing “far more moderate house price gains,” with Ontarian regions outside Toronto and London posting year-over-year increases of 2.2% for detached bungalows and 2.0% for standard two-storey homes. The average price increases for a home in Ottawa, the nation’s capital, remained relatively flat at 1.3% for a bungalow and 0.8% for a two-storey home.
Phil Soper, President and Chief Executive of Royal LePage, noted that “chronic supply shortages are driving price spikes in Canada’s major cities, masking otherwise moderate home price appreciation nationally.” He went on to add that “while a widening affordability gap in Canada’s largest urban centres is characterizing the national market Canadians read about daily, year-over-year house price increases in most regions of the country are presently tracking below the historical average.”
National Average Home Price Expected to Rise 5.1%
Looking ahead to the remaining months of 2014, the report from Royal LePage expects that the national average house price will increase at 5.1% for the full year. According to Soper, Royal LePage sees “price increases in Canada’s largest cities moderating, just as our smaller cities should see a lift.” The low interest rate environment in Canada, coupled with a stable job market, continues to support the national housing market. Soper also noted that while Royal LePage has supported many recent federal regulatory changes aimed at managing housing demand, a move to further restrict home ownership at this time is not warranted and would cause unintended hardship to young Canadian home buyers and those living outside a few of the country’s largest cities.
Read the full report on the Royal LePage website, and browse our website for a sales representative who can offer more information on the latest market trends in your specific Ottawa neighbourhood. For more advice, please contact us directly or at any of our branch locations, and be sure to subscribe to our blog for up-to-date real estate news, tips for buyers and sellers, and more.
