Royal LePage report says pace of home prices slowed in second quarter

Irving Hamilton
July 12, 2018

The aggregate price of a home in the capital region increased 5.3 per cent year-over-year to $659,685 in 2018's second quarter. Royal LePage found the median price of a two-storey home in Canada overall reached $720,504, while the median nation-wide price of a bungalow was $512,979. "We're increasingly seeing millennials move into these units in the downtown area, enabling this demographic to enjoy urban living".

Canadian house prices are expected to climb significantly in the second half of 2018, driven by price gains in the Toronto region as buyers adapt to new mortgage rules that cooled the market in the first half of the year.

Royal LePage chief executive officer Phil Soper said the spring market "never blossomed" but he expects the second half of the year to be stronger as buyers adjust to the new mortgage stress-test rule that took effect January 1.

"For the better part of six months, Calgary has been caught in the crossfire of an effort to curb rapid home price appreciation in areas like Toronto and Vancouver", said Corinne Lyall, broker and owner, Royal LePage Benchmark, in a statement.

The median condo price in Surrey is now $381,626, up 25.6 per cent compared to past year.

A new forecast by Royal LePage predicts home prices will rise 4.5 per cent nationally by the fourth quarter of 2018 compared with the second quarter ended June 30, hitting a national aggregate price of $641,597 by the end of the year.

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"The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018", Soper continued.

While prices fell nearly 2 per cent in the GTA in the second quarter compared with the same period previous year, they were up 11 per cent in the Niagara and St. Catharines region, 9 per cent in London, 8.2 per cent in Kitchener/Waterloo, 10 per cent in Kingston and 6 per cent in Hamilton.

Toronto's long-overheated housing market cooled after several quarters of rapid growth a year ago, which sent prices skyrocketing. "The fundamentals have not changed".

"When you look at the underlying driving forces of the economy they're very strong - employment is up - unemployment down, income is rising in Hamilton". "Upward pressure on prices will likely return to most markets this quarter".

However, Soper was optimistic about the prospects for sales and values over the next couple of quarters. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of nearly 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. The median is the midway point between the lowest and highest prices; it is not the average. Data is provided by RPS Real Property Solutions.

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