Canada's Housing Market Remained Buoyant In Fourth Quarter

Strong demand generates double-digit gains in western markets

(Thursday, January 12, 2006) - The country's housing market showed remarkable strength in the traditionally slower fourth quarter as sales activity in most major markets stimulated robust year-over-year increases in average prices, according to a fourth quarter report released today by Royal LePage Real Estate Services.

The highest average price appreciation occurred in detached bungalows, which rose to $269,810 (+9.1%), followed by standard condominiums, which increased to $190,123 (+7.0%), and standard two-storey properties, which rose to $327,269 (+7.0%).

Homeowners in the energy-producing West saw the value of their properties appreciate at a much higher rate than elsewhere in Canada, reflecting a shortage in supply relative to the booming demand for home ownership. These areas enjoyed growth well above the national average as their thriving economies generated strong income growth and attracted increased in-migration to the region. In contrast, markets east of Manitoba eased towards more stabilized conditions in the quarter as inventory levels rose and demand moderated.

"The Canadian housing market is clearly reflecting the state-of-the-nation. In Central and Atlantic Canada, a sound growing economy is fuelling generous activity levels and moderate price increases; in the roaring West, demand for home ownership is overwhelming supply, and prices have surged upward," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

Major markets in Alberta, British Columbia and Manitoba experienced the country's highest price increases, with double-digit gains seen across all three housing categories. Victoria led the country in price appreciation for the fourth consecutive quarter with prices in its relatively smaller condominium market rising a dramatic 30.0 per cent over the same period in 2004. Calgary and Edmonton had the tightest inventory supplies as rising demand depleted active listings in these markets.

Added Soper: "The country's economy is operating at full capacity and is expected to do so through 2007. A tight labour market will mean higher salaries and more money in people's pockets. That money will continue to find its way into housing, as the family home continues to be one of the soundest long term investments a Canadian can make. Balancing this, we will see moderately higher interest rates to thwart inflation, which will help keep a lid on house price increases in most of the country."

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