The Canadian housing market roared to a close in 2004, with prices bucking the traditional year-end slowdown by rising uncharacteristically high in the last three months of the year, a leading real estate company said yesterday.
The 15-city study by Royal LePage Real Estate Services of 78 markets found price increases for detached bungalows in 88 per cent of the markets, standard two-storey houses in 86 per cent and standard condominiums in 80 per cent.
Standard condominiums saw the highest average sales price appreciation -- 7.3 per cent, year over year, to $172,185. That was followed by the increase in prices for standard two-storey homes, which rose by 6.3 per cent to $302,107, and detached bungalows, up 5.8 per cent to $251,238.
Late last month, Royal LePage chief executive officer Phil Soper predicted that housing price increases in 2005 will moderate to about 4.5 per cent, well below the 9-per-cent surge seen in 2004 and 2003.
Despite the fourth-quarter pricing surge, Mr. Soper said yesterday that he is sticking to his prediction that the Canadian housing market will cool down from a red-hot 2004. He said the late 2004 price increases reflected a strong economy and continued low mortgage rates. More moderate weather than usual also provided a spark, making it more comfortable in various regions for prospective home buyers to shop for new dwellings.
"The market in the fourth quarter of 2004 remained, for the most part in most centres, a seller's market, but the winds of change were blowing and buyers will see better days ahead," Mr. Soper said in an interview Friday.
"Whether the slowdown happens in January or later in the year, the market will cool. And it is cooling now," he added.
Mr. Soper said that inventory levels are rising and that homes are staying on the market for longer than they were at peak periods last year -- factors that will affect prices this year. In the October-December period, Vancouver, Victoria and Winnipeg experienced the highest price increases, respectively, with double-digit appreciation across all three housing categories in these cities.
In West Vancouver, the price of a standard two-storey home rose by 20 per cent year over year to an average of $720,000 as of Dec. 31.
Victoria condominium prices increased by about 13 per cent to an average of $170,000 at the end of the year and Winnipeg bungalows rose 10 per cent to an average of $177,679.