Royal LePage says Canadian home prices rose in Q3, but may be moderating

Photo: The Canadian Press. All rights reserved.

A sale signs stand in front of a condominium Tuesday, September 27, 2011 in Montreal. THE CANADIAN PRESS/Ryan Remiorz

TORONTO - Royal LePage says there are signs that prices in Canada's red-hot housing market may be tapering off.

In its latest survey, the national real estate organization found that average prices for condos and houses across the country were up between 4.4 and 6.1 per cent year over year in the third quarter.

Royal LePage says the average price for a standard two-storey house rose 5.5 per cent to $441,714, while detached bungalows increased 6.1 per cent to $405,101 and condominiums on average saw a 4.4 per cent increase to $257,377.

Toronto and Calgary recorded the biggest increases, with the average price for a detached home in Toronto jumping between 7.2 and eight per cent.

In Calgary, where housing continues to be in high demand due to an expanding workforce, the average price for a standard condominium surged 11.8 per cent year over year to $294,156 and detached bungalows increased 10.8 per cent to $515,844. Prices for standard two-storey homes climbed 9.2 per cent to $499,811.

Overall, home prices in Halifax, Ottawa and Winnipeg remained relatively flat while Regina saw price decreases. St. John's, N.L.; Montreal, Edmonton and Vancouver experienced growth in the third quarter.

"In the seven years since the Canadian housing market began its recovery from the worldwide recession, home price growth has been robust, often greater than the long-term average of approximately five per cent," Phil Soper, president and chief executive of Royal LePage, said in a statement.

"We are now experiencing a natural slowing in the rate of year-over-year price appreciation, with real estate markets moderating in most parts of the country, a transition to what our agents refer to as a 'Goldilocks market,' one that is neither too hot, nor too cold."

"To be clear, we expect home prices to continue to grow in the months ahead, but at a slower rate than we have seen in recent years," Soper added.

Royal LePage says the Canadian housing market is being supported a continued low interest rates, and improving business investment and job growth. If the Canadian dollar continues to head lower, it may also spur the country's export sector.

"The brisk pace, sometimes approaching frenetic, that we have seen in recent months in some of Canada's largest real estate markets is slowing. Slower, yet still growing. And the current environment remains supportive of a healthy and sustainable housing market," added Soper.