The Royal LePage House Price Survey and Market Survey Forecast released Tuesday showed slight year-over-year price increases across all three housing categories surveyed in Charlottetown.
Average detached bungalow prices in the region rose 2.4 per cent year-over-year to $172,000, while standard two-storey homes grew 2.5 per cent to $205,000. Standard condominium prices increased 1.6 per cent to $127,000.
Ken Peters, broker and owner, Royal LePage Peters & Lank Realty, says low interest rates continue to fuel the Charlottetown market.
“First-time buyers are driving sales but we’re also seeing older buyers downsizing and moving into condominiums as their children leave home.”
Peters also added that fourth quarter activity was influenced by the upcoming Harmonized Sales Tax (HST), due to be introduced in April 2013.
Nationally, the average price of a home increased year-over-year between 2.0 and 4.0 per cent in the fourth quarter of 2012. In the fourth quarter, standard two-storey homes rose 4.0 per cent year-over-year to $390,444, while detached bungalows increased 3.6 per cent to $356,790. National average prices for standard condominiums increased 2.0 per cent to $239,374.
As home sales volumes slowed in the second half of 2012, the average Canadian house price, for the most part, held firm. Some consumers delayed their entry into the market during 2012, faced with economic uncertainty as governments in both the U.S. and Europe struggled with debt management plans and as homes in some regions became less affordable. Compared to 2012, fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices are rising.
Phil Soper, president and chief executive, Royal LePage, said the housing market is well into a cyclical correction and that fears of a sharp or drawn out collapse are unwarranted.
Home prices have risen faster than salaries and wages for three years and the market requires time to adjust. By the end of 2013, Royal LePage expects the average national home price to be 1.0 per cent higher compared to 2012.
“A helpful comparison is to reflect on the beginning of 2009 when the country was in the grips of a very grim global recession,” said Soper.
“It was a bleak time, with plunging consumer confidence driven by rapidly spreading unemployment. The meltdown of the American banking and finance sector had sent their housing market into a downward spiral and our own real estate market saw home sale transactions fall dramatically. Price appreciation in Canada ground to a halt, but home values dropped only slightly. With economic fundamentals such as employment levels improving, we expect this cyclical correction to be short-lived.”