TORONTO, January 6, 2011
The low cost of borrowing stimulated the housing market in 2010, and this trend is predicted to continue in the first half of 2011. The widely held consumerbelief that rates will rise in the latter part of 2011 may prompt an increase in buying activity early in the year.
“Trends in the housing market continue to be driven by the lingering after-effects of the recession,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels. We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs.
Across Canada, the average price of a home is forecast to rise 3 per cent in the coming year to $348,600 while the number of transactions is expected to drop 2 per cent. During the fourth quarter of 2010, average home prices either increased or stabilized year-over-year, Nationally, the average price of detached bungalows rose to $324,531 (up 4.6 per cent), the price of standard two-storey homes rose to $360,329 (up 4.4 per cent).
For 2011, price increases are expected to be very modest at approximately 1 per cent.
Information provided by the Dion-Ivans Group and Royal LePage.
– The average price of a home in Canada increased between 3.9 and 4.6 per cent in the fourth quarter of 2010, compared to the previous year, as markets shrugged off a lackluster third quarter and returned to a post-recession growth profile. Home values are forecast to continue a moderate and steady climb in many of the country’s key housing markets through 2011 with sales activity skewed to the first half of the year, according to the Royal LePage House Price Survey and Market Survey Forecast just released.
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