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Canadian home prices to rise less than expected inflation rate in 2012

Canadian home prices to rise less than expected inflation rate in 2012

Canada's housing market will continue to be strong this year real estate brokerage firm Royal LePage said Thursday.
 

Canada's housing market will continue to be strong this year real estate brokerage firm Royal LePage said Thursday.

Photograph by: Marcos Townsend, Gazette file photo

MONTREAL - Canadian home prices on average will rise less than the expected inflation rate in 2012, says national broker Royal LePage. But it dismissed the possibility of a national price correction.

In its quarterly forecast, Royal LePage says it expects the average home price to go up 2.8 per cent by year-end, compared with an inflation rate of about 2.9 per cent.

Canadian Real Estate Association data show the average home selling price was $360,396 in November, up 4.6 per cent from a year earlier.

But LePage notes that over the past five years average home prices have grown by just 3.5 per cent annually or well below the long-term trend.

Lepage said it does not expect a national. price correction till 2013 at the earliest. “Widespread calls for a major correction in 2012 can’t be justified,” president Phil Soper said. Resource-based cities such as Calgary, Regina and Winnipeg will outperform Toronto and Vancouver, he added.