Tuesday, November 25, 2008

Canadian Average Home Prices Up In Third Quarter

Home prices in Canada's resale real estate market continued to grow modestly through the third quarter in most major cities, according to a house price survey report recently released by Royal LePage Real Estate Services. This dissimilar Canadian trend is in stark contrast to the housing market woes that continue to plague the United States.

The year 2007 marked the peak of Canada's longest sustained residential real estate market expansion. It was a period characterized by higher-than-normal annual unit sales, constrained listings supply, and in many cases, sharp price increases. It is not surprising that the regions that had experienced the largest and quickest rise in home value are now experiencing easing price appreciation trends, as their markets return to more balanced conditions.

From coast to coast, strong fundamentals, such as favourable rates of employment, solid local economies, and the continuing availability of affordable mortgage financing, have positioned Canada's housing market to weather the storm south of the border and allow the country to continue to chart its own course.

"Canada's housing market is holding up well, with resilient buyer demand supporting house prices that continue to inch upwards. While rate of price appreciation is obviously tempering across the entire country, it's important to underscore the fact that Canada's housing market is supported by markedly different and stronger economic fundamentals than those that American homeowners are wrestling with," said Phil Soper, president and chief executive, Royal LePage Real Estate Services.

"For the most part, Canadian home buyers have been able to shrug off the gloomy stories of economic woe from south of the border and are taking advantage of reasonable financing options and healthy levels of housing supply. Average house price appreciation curves are beginning to flatten, but this is a completely natural reaction to the explosive gains that characterized the market earlier this decade."

Soper added, "The Canadian housing market is on a very different path than that experienced by our American neighbours. Credit-worthy Canadians continue to have wide access to fairly priced mortgages. While we are not immune to the serious problems facing global credit markets, our financial institutions are in much better shape than mortgage providers in the U.S. In Canada, subprime or high-risk mortgages account for a small portion of our banks' portfolios and the mortgage approval process has many more checks and balances in place. As such, we should expect stability in Canada's real estate market."

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