Housing prices rise in 4th quarter, demand continues for luxury homes
House prices in Canada rose in the last quarter of 2013, according to the latest survey by Royal LePage, which found that the average price of a home in Canada increased between 1.2 per cent and 3.8 per cent in the fourth quarter.
Royal LePage said the average cost of a standard two-storey home rose 3.6 per cent year over year to $418,282, while detached bungalows went up 3.8 per cent to $380,710.
Standard condominiums rose 1.2 per cent in the quarter to an average of $246,530.
The real estate company said prices are expected to maintain a “healthy momentum” this year and rise a projected 3.7 per cent over 2013.
Royal LePage CEO Phil Soper said late 2013 saw the housing market transition to “buoyant sales volumes” and above-average growth.
“Talk of a soft landing for Canada’s real estate market in the new year is misguided,” said Soper.
“We expect no landing, no slowdown, and no correction in the near-term. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”
Not everyone has agreed with that assessment, with a number of analysts have previously said they expect some cooling in 2014 even if housing demand remains relatively strong across most provinces.
They believe housing prices will remain flat or rise only slightly as credit growth slows and employment growth moderates.
For example, Scotiabank chief economist Warren Jestin said in December that he didn’t expect the upward trend of the past five years to continue, adding he believed the market would level out and perhaps go through a bit of an adjustment over the next two or three years.
Meanwhile, a separate report released Thursday by Sotheby’s International Realty Canada suggested that some Canadians were living large again in 2013 as luxury home sales in most of the country’s biggest cities rose more than expected.
The biannual report found that sales of homes priced more than $1 million in Calgary, Vancouver and Toronto grew despite a slow start at the beginning of the year.
Calgary saw the highest year-over-year sales growth, with a 33 per cent gain, followed by Vancouver with 19 per cent and Toronto with 13 per cent. Montreal was the only major city to see the number of high-end homes sold in the year decline compared with 2012.
“2013 proved to be a year that defied many analyst predictions,” Sotheby’s chief executive, Ross McCredie, said in a statement.
“We expect to see continued growth in western Canada’s high-end housing market, specifically in attached and single-family homes in Vancouver and Calgary.”
The report suggests that the strength of Calgary’s luxury home market was aided by various factors including international immigration, inter-provincial migration and growing foreign investment in the region’s resource industry.
It noted that even the massive flooding that hit the city over the summer did little to dampen the appetite for the luxury home market.
For the year, there were 722 condominiums and attached and single-family houses sold in Calgary. Seven of these homes were sold for more than $4 million.
The report said interest is expected to grow particularly in Calgary’s Elbow Park/Glencoe and Springbank neighbourhood, noting that if demand continues, there may be a shortage for homes priced between $1 million and $2 million later this year.
The sale of high-end condominiums in the city also grew in 2013, as sales of units priced at more than $1 million climbed by 44 per cent year over year.
Meanwhile, Sotheby’s said buyer confidence seemed to have returned to Vancouver in 2013, following a 19-month stretch of declining year-over-year sales.
There were 2,505 condominiums and attached or single family homes sold for more than $1 million in Vancouver in 2013. Property sales en in the $2-million to $4-million range also jumped 35 per cent, while sales of homes over $4 million rose 48 per cent year over year.
In the Greater Toronto Area, which includes Toronto and the surrounding regions, property sales of more than $1 million increased by 13 per cent last year to 5,449 home sold.
Property sales priced between $2 million to $4 million also saw an uptick of 17 per cent, while sales worth more than $4 million jumped by 52 per cent compared with 2012.
The report said condo sales rose by a mere one per cent year-over-year in Toronto amid uncertainty over a possible oversupply in the condo market.
Despite a rosy picture for the high-end housing market in major Canadian cities, this sentiment did not seem to extend to Montreal, even though the number of international buyers accounted for nearly half of all luxury property purchases last year.
Montreal saw 359 condos, single and attached homes sold in 2013 for over $1 million. Thirty-eight properties were sold in the $2 million to $4 million range and only one unit sold for more than $4 million.