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Montreal posts house price gains during the fourth quarter of 2012 and further increases are anticipated for 2013

Montreal posts house price gains during the fourth quarter of 2012 and further increases are anticipated for 2013

 

Repeat buyers and increased sales of high-end homes upwardly skewed average prices;
Correction not likely if global economy continues to recover in the upcoming year

MONTREAL, Jan. 8, 2013 /CNW/ - Today's House Price Survey and Market Survey Forecast, issued by Royal LePage, reports that house prices on the Island of Montreal were up in the fourth quarter when compared with the same period last year. Due to the influence of new mortgage lending rules, first-time buyers were less active in the fourth quarter than in preceding years. However, repeat buyers were more active, which stimulated sales of high-end homes and upwardly skewed the average price of homes surveyed in the metropolitan area. Royal LePage is expecting the average house price to increase slightly in 2013, although the actual number of sales is expected to slightly decrease.

In the fourth quarter of 2012, the average price of a detached bungalow increased to $282,911, which was 2.2 per cent year-over-year increase. The average price of a standard two-storey house increased 5.3 per cent to $379,546, while standard condominiums rose 4.7 per cent to $240,272.

"Given the new mortgage lending rules, which came into effect during the summer, first-time buyers were much less active in the market than in previous years. That being said however, high-end homes sold well, leaving behind a sizeable inventory of more affordable housing and upwardly skewed average house prices," said Dominic St-Pierre, director, Royal LePage Real Estate Services for the Quebec Region,

"Luxury home buyers were more active this year and we're seeing homes valued at more than a million dollars selling quite well. However, multiple offers have become relatively rare in our market, with the exception of very desirable listings with an attractive price," added St-Pierre.

The reluctance of first-time buyers has also had an effect on the total inventory of properties. "Currently, the market has a large inventory of more affordable homes because the new mortgage lending rules have dampened first-time home buyer activity compared to the same period in previous years, where they were more active. This decreased activity has had a direct impact on repeat buyers, who need to sell their current property in order to purchase a new one. The inventory of standard condominiums was most affected this past year and witnessed more than a 30 per cent increase over the previous year's figures," noted St-Pierre.

In 2013, house prices will continue to rise, although more modestly, and should be 3.8 per cent higher by year end. In this respect, St-Pierre is optimistic. "Despite the fact that some financial institutions are forecasting that prices will remain stable or even decline, we believe that the growth we've seen over the last few months will continue well into 2013. The one drawback will be that the actual number of sales will probably see a decrease of 2.4 per cent. Pressure exerted by new condominium developments should also have a significant impact on the resale market, as it will not only boost competition but also slow price increases for this property type. However, the number of single-family homes on the market dropped in November, which is a sign that supply and demand should be in better balance in 2013."

Once again this year, the biggest factor impacting Quebec's real estate market will be consumer confidence. "We already know that interest rates will remain low and that the unemployment rate will stay favourable as well, so the remaining key factor affecting the real estate market will be how confident Quebec buyers feel. The confidence level is not at its highest right now, but it's not at its lowest either. Any positive or negative influence on consumer confidence will likely be due to factors outside Quebec. While the housing market and the overall economy in the U.S. are showing signs of recovery, the situation in Europe remains concerning, and that could eventually have an impact on our market," concluded St-Pierre.

House price survey in Canada for the fourth quarter of 2012

Average house prices

Detached bungalow
Market Average
Q4 2012
Average
last
quarter
Average
Q4 2011
Difference (%)
Detached bungalow
Beaconsfield 330,250 331,000 307,500 7.4%
Dorval 290,000 305,000 290,000 0.0%
Pierrefonds 285,000 289,000 288,500 -1.2%
Westmount* n/a n/a n/a n/a
Notre-Dame-de-Grâce/
Côte-des-Neiges*
n/a n/a n/a n/a
Ville-Marie* n/a n/a n/a n/a
Plateau Mont-Royal* n/a n/a n/a n/a
Rosemont/La Petite Patrie* n/a n/a n/a n/a
Laval 279,000 276,000 271,000 3.0%
Brossard 256,750 263,500 255,000 0.7%
Longueuil 249,000 247,000 240,000 3.8%
Boucherville 290,375 301,000 286,500 1.4%
Montreal 282,911 287,500 276,929 2.2%

*Type of property not covered in the market

 

 

Two-storey house
Market Average
Q4 2012
Average
last
quarter
Average
Q4 2011
Difference (%)
Two-storey
house
Beaconsfield* n/a n/a n/a n/a
Dorval 306,500 316,000 277,500 10.5%
Pierrefonds 387,750 397,000 390,000 -0.6%
Westmount* n/a n/a n/a n/a
Notre-Dame-de-Grâce/
Côte-des-Neiges
499,750 510,000 470,000 6.3%
Ville-Marie* n/a n/a n/a n/a
Plateau Mont-Royal* n/a n/a n/a n/a
Rosemont/La Petite Patrie* n/a n/a n/a n/a
Laval 334,625 358,500 320,000 4.6%
Brossard 373,200 379,000 357,500 4.4%
Longueuil 335,000 335,000 338,250 -1.0%
Boucherville 420,000 419,000 370,000 13.5%
Montreal 379,546 387,786 360,464 5.3%

*Type of property not covered in the market

 

 

Standard condominium
Market Average
Q4 2012
Average
last
quarter
Average
Q4 2011
Difference (%)
Standard
condominium
Beaconsfield* n/a n/a n/a n/a
Dorval* n/a n/a n/a n/a
Pierrefonds 208,500 203,750 203,000 2.7%
Westmount* n/a n/a n/a n/a
Notre-Dame-de-Grâce/
Côte-des-Neiges
266,750 246,000 241,250 10.6%
Ville-Marie 325,000 324,500 305,000 6.6%
Plateau Mont-Royal 320,000 315,650 307,750 4.0%
Rosemont/La Petite Patrie 271,200 270,000 254,250 6.7%
Laval 195,000 194,000 190,000 2.6%
Brossard 189,000 189,000 192,500 -1.8%
Longueuil 177,000 180,000 168,000 5.4%
Boucherville 210,000 210,000 204,000 2.9%
Montreal 240,272 236,989 229,528 4.7%

*Type of property not covered in the market

 

About the Royal LePage House Price Survey

The Royal LePage House Price Survey is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast.  This release references an abbreviated version of the survey which highlights house price trends for the three most common types of housing in Canada in 90 communities across the country.  A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the fourth quarter 2012. A printable version of the fourth quarter 2012 survey will be available online on February 6, 2013.

Housing values in the Royal LePage House Price Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts.