January 7, 2011.
Good news everyone, Canada’s housing market is going to have a banner year!
Royal LePage reported that in the last quarter of 2010, average house prices rose between 3.9 to 4.6 per cent.
The report released Thursday said that the average home price is expected to rise by three percent to approximately $348,600 this year. The number of transactions, however, is expected to decrease by 2 per cent.
With less transactions and more money needed to buy a home, low borrowing costs at the ending of last year will likely continue into the first half of this year which will help the housing industry. Also, homebuyers should be aware of an increase in mortgage rates later in 2011.
“Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels. We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs”, says President and Chief Executive of Royal LePage Real Estate Services, Phil Soper.
Soper also added, “2011 is expected to unfold much like 2010, when close to 60 per cent of sales volume occurred in the first half of the year in anticipation of interest rate increases that never materialized. However, housing market activity in the first half of 2011 will be modestly closer to the norm”.
If you are living in Alberta, you can expect to see an increase of home prices in Calgary around 5.4 per cent this year and Edmonton will see an increase around 3.3 per cent. Home sale transactions in Calgary are projected to rise 6.7 per cent and a higher percentage for Edmonton at 9.1.
So, Canada, forget about the World Hockey Juniors in Buffalo, and stay focused on Canada’s housing sector which will be looking to start, and most importantly finish, 2011 strong.