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Stable national real estate market forecast to endure

- Housing market sees bounce back from 'awful winter' - Royal LePage
    revises forecast to the positive -

    TORONTO, July 7 /CNW/ - Canada's resale housing market recovered lost
ground in the second quarter and is poised to stabilize for the remainder of
2009, after a very slow start to the year, according to the Royal LePage
Market Survey Forecast and House Price Survey released today. As the economy
begins to stabilize and consumer confidence improves, house prices are
expected to appreciate slightly in much of eastern and central Canada. Greater
than national average price declines are predicted for the western cities that
saw the greatest price inflation earlier in the decade, including Edmonton,
Calgary and Vancouver.
    "Given the grim shape that Canada's real estate market was in this past
winter, the turnaround we have witnessed in the second quarter is really quite
remarkable. We believe this improvement represents a sustainable change across
the country. While seasonally weaker conditions are to be expected in the
fall, the plucky Canadian real estate market is stabilizing and a healthy
level of activity is forecast for the second half of 2009," said Phil Soper,
president and chief executive officer, Royal LePage Real Estate Services.
    During the second quarter, average house prices across most Canadian
markets began to appreciate, recovering from the lows experienced during the
winter months. Average national prices remain slightly behind those posted
during the same period in 2008. Of the housing types surveyed, the price of
detached bungalows declined to $327,964 (-3.5 per cent), two storey property
prices decreased to $392,378 (-3.7 per cent), and standard condominiums price
points fell slightly to $236,612 (-4.0 per cent), year-over-year.
    Soper observed, "With our industry's busiest quarter behind us, we feel
comfortable revising our 2009 forecast to the positive. When the anticipated
market decline struck last winter, it was with greater speed and intensity
than predicted, but the strength of the rebound was equally surprising. If
general economic conditions continue to improve, as we expect they will, 2009
will be characterized as a period of moderate housing market correction after
several years of above-average price growth."
    The 2009 national average house price is forecast to decline marginally
by 2.0 percent, to $297,500 by end of year and unit sales are projected to
fall slightly by 1.0 percent to 430,000.
    "Improved affordability, driven by flat or lower home prices and
inexpensive mortgage financing, has been the principle catalyst in this
recovery. Pent up demand is also a factor in the lift we see in the second
quarter numbers. For six months straddling the year's beginning, buyers stayed
away from the market in an understandable, emotional reaction to very
unsettled global economic conditions. Canadians appear to be stepping beyond
these fears and are once again moving onto and up the home ownership ladder,"
stated Soper.
    In early 2009, the precipitous drop in unit sales remains the most
dramatic indicator of the recession's impact on Canada's real estate market.
With spring, consumers appeared ready to believe the worst was behind them and
returned to the market in force, driving increased activity across each
housing type. Couple this with historically low interest rates and leveling
unemployment, Canada's residential real estate market got back on track during
the quarter.
    Undergoing an inevitable cyclical correction, price adjustments can be
seen with marked variances across Canada's provinces. As expected, British
Columbia and Alberta posted the most significant price modifications, as home
values in those markets retreated in the wake of several mid-decade years of
unsustainable price inflation, and have now evolved to a more balanced state.
Prices appear to have stabilized and it is expected that these regions will
continue to see improvements into 2010. In particular, the impact of lower
home prices has improved affordability to the point that people are buying
homes again on the West Coast, where sales activity has increased
substantially.
    Alternatively in Atlantic Canada, homes continue to appreciate due to
strong local economies, which have helped to shelter the region somewhat from
the turbulence witnessed in other provinces. As well, the region's generally
moderate home prices have helped keep demand strong. Newfoundland, in
particular, stands out as a region that continues to see significant home
price appreciation, as supply cannot keep up with the demand driven by vibrant
and growing industries such as those in the province's oil and gas sector.
    Meanwhile, home prices in Toronto declined slightly in the second
quarter, reflecting the national average trend. In the early spring, it was
first-time buyers who triggered the increased activity levels, now those
looking to move up are also active in the market. Similar to the situation in
other large cities in central Canada, the most desirable neighbourhoods
experienced supply shortages, which put upward pressure on prices.
    "Looking ahead to the second half of 2009, year-over-year price
comparisons will likely appear increasingly more favourable. It is important
to remember that the baseline for the latter half of 2008 was unusually low,
particularly in the fourth quarter when the full impact of the global
financial crisis was felt. Our expectation is that most Canadian regions will
experience stable housing prices through into the spring of 2010," concluded
Soper.

    REGIONAL MARKET SUMMARIES

    Halifax

    In Halifax, a stable economy has contributed to a healthy real estate
market where average house prices increased modestly despite a slight dip in
sales activity. The market is beginning to pick up following a slow first
quarter. Pent up demand will see a return to a more active market in the last
half of the 2009 with the anticipation of a slight boost in sales activity and
average house prices growing at a leisurely pace.

    Montreal

    The housing market in Montreal experienced a solid second quarter, with
average house prices for most property types expected to increase for the
remainder of 2009. Higher inventory levels resulted in balanced market
conditions seeing the number of new listings equal to the number of sales. Low
interest and unemployment rates will help maintain the strength of the real
estate market through to the end of the year.

    Ottawa

    Ottawa continues to remain a steady market for residential real estate,
with sales activity in the second quarter coming out strong from a slow first
quarter. Ranked number two among Canada's large cities for affordable real
estate and coupled with low interest rates, all types of buyers were drawn to
the market. House prices are expected to remain stable throughout the
remainder of year with numbers slightly higher than anticipated.

    Toronto

    In Toronto, the real estate market witnessed significant second quarter
gains. The return of consumer confidence and an upswing in spring market
activity brought house prices and unit sales down as buyers emerged to take
advantage of affordable properties and low lending rates.
    As the market begins its transition from a buyer's market to a balanced
market, with indications of a seller's market arising, it's anticipated that
the market will stabilize by the end of year.

    Winnipeg

    Winnipeg's real estate market has remained relatively resilient in the
second quarter with average house prices in key housing segments increasing
from the first quarter of 2009. Real estate in Winnipeg is modestly priced
when compared to other cities in Canada, creating ideal conditions for buyers
in the province. Looking ahead, average house prices are anticipated to
stabilize for the remainder of the year.

    Regina

    Regina's real estate market started on the road to recovery in the second
quarter of 2009 and is expected to further improve through the remainder of
the year. An increase in unit sales helped diminish the city's high inventory
levels as buyers are beginning to initiate deals. Recovering manufacturing and
resource sectors, new construction activity in Regina, and low interest rates
have also helped to improve buyer confidence.

    Calgary

    With the economic downturn and the oil and gas industry struggling, the
housing market in Calgary has been on the decline since 2008, after many years
of price inflation at the beginning of the decade. Quarter one of 2009
revealed some signs of price increases and stabilization in certain areas in
Calgary, but the second quarter reveals fluctuations in the market. These
price fluctuations are occurring across Calgary in all housing types with the
market forecast predicting price reductions for the remainder of 2009.

    Edmonton

    Housing market conditions in Edmonton were characterized by lower
inventory levels and moderate house price increases. Buyer demand was strong
during the second quarter as most buyers felt a sense of urgency to capitalize
on the recent market conditions. This has led to a slight tightening in
Edmonton's housing market with appreciation in average house prices expected
for the last half of 2009.

    Vancouver

    Vancouver's real estate market stabilized in the second quarter of 2009
following a price correction that started last fall moving towards a balance
between supply and demand. Properties priced at, or below, market value are
generating multiple offers from buyers. Average house prices throughout the
last half of the year are expected to inch upwards, but increases will likely
be in the low single digits.

    Royal LePage's quarterly House Price Survey shows the following annual
change of prices for key housing segments in select national markets:

    -------------------------------------------------------------------------
                             Detached Bungalows
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008    Bungalow %
      Market              Average        Average        Average      Change
    -------------------------------------------------------------------------
    Halifax               235,333        215,667        233,000          1.0%
    -------------------------------------------------------------------------
    Charlottetown         160,000        157,000        156,000          2.6%
    -------------------------------------------------------------------------
    Moncton               158,000        156,000        164,000         -3.7%
    -------------------------------------------------------------------------
    Fredericton           172,000        167,000        162,000          6.2%
    -------------------------------------------------------------------------
    Saint John            187,681        201,476        202,364         -7.3%
    -------------------------------------------------------------------------
    St. John's            200,000        193,000        181,000         10.5%
    -------------------------------------------------------------------------
    Atlantic              198,368        190,748        192,636          3.0%
    -------------------------------------------------------------------------
    Montreal              236,148        232,375        234,352          0.8%
    -------------------------------------------------------------------------
    Ottawa                325,417        317,500        316,167          2.9%
    -------------------------------------------------------------------------
    Toronto               416,179        405,286        434,282         -4.2%
    -------------------------------------------------------------------------
    Winnipeg              237,750        231,663        233,800          1.7%
    -------------------------------------------------------------------------
    Regina                272,900        266,625        278,850         -2.1%
    -------------------------------------------------------------------------
    Saskatoon             312,250        312,500        340,375         -8.3%
    -------------------------------------------------------------------------
    Calgary               401,600        391,833        438,122         -8.3%
    -------------------------------------------------------------------------
    Edmonton              302,143        297,857        320,000         -5.6%
    -------------------------------------------------------------------------
    Vancouver             760,000        743,750        839,500         -9.5%
    -------------------------------------------------------------------------
    Victoria              466,000        453,000        450,000          3.6%
    -------------------------------------------------------------------------
    National              327,964        319,865        339,879         -3.5%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                             Standard Two Storey
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008    2 Storey %
      Market              Average        Average        Average      Change
    -------------------------------------------------------------------------
    Halifax               277,333        262,333        275,000          0.8%
    -------------------------------------------------------------------------
    Charlottetown         190,000        188,000        185,000          2.7%
    -------------------------------------------------------------------------
    Moncton               134,200        134,500        132,000          1.7%
    -------------------------------------------------------------------------
    Fredericton           210,000        210,000        197,000          6.6%
    -------------------------------------------------------------------------
    Saint John            240,889        268,000        285,179        -15.5%
    -------------------------------------------------------------------------
    St. John's            276,000        267,000        249,333         10.7%
    -------------------------------------------------------------------------
    Atlantic              198,368        190,748        192,636          3.0%
    -------------------------------------------------------------------------
    Montreal              337,872        330,056        336,443          0.4%
    -------------------------------------------------------------------------
    Ottawa                325,417        318,500        315,750          3.1%
    -------------------------------------------------------------------------
    Toronto               544,785        516,052        562,478         -3.1%
    -------------------------------------------------------------------------
    Winnipeg              262,914        251,721        257,800          2.0%
    -------------------------------------------------------------------------
    Regina                245,000        245,000        254,000         -3.5%
    -------------------------------------------------------------------------
    Saskatoon             337,250        348,500        388,000        -13.1%
    -------------------------------------------------------------------------
    Calgary               400,167        390,689        437,744         -8.6%
    -------------------------------------------------------------------------
    Edmonton              328,571        322,979        348,571         -5.7%
    -------------------------------------------------------------------------
    Vancouver             846,000        828,750        943,000        -10.3%
    -------------------------------------------------------------------------
    Victoria              446,000        435,000        470,000         -5.1%
    -------------------------------------------------------------------------
    National              392,378        379,708        407,374         -3.7%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                            Standard Condominium
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008       Condo %
      Market              Average        Average        Average       Change
    -------------------------------------------------------------------------
    Halifax               164,000        162,000        154,500          6.1%
    -------------------------------------------------------------------------
    Charlottetown         120,000        120,000        120,000          0.0%
    -------------------------------------------------------------------------
    Moncton                   n/a            n/a            n/a          n/a
    -------------------------------------------------------------------------
    Fredericton           140,000        137,000        126,000         11.1%
    -------------------------------------------------------------------------
    Saint John            126,000        181,387        119,191          5.7%
    -------------------------------------------------------------------------
    St. John's            215,333        205,667        193,333         11.4%
    -------------------------------------------------------------------------
    Atlantic              174,623        172,423        156,774         11.4%
    -------------------------------------------------------------------------
    Montreal              209,311        206,528        204,942          2.1%
    -------------------------------------------------------------------------
    Ottawa                212,750        207,833        203,667          4.5%
    -------------------------------------------------------------------------
    Toronto               296,039        289,397        311,026         -4.8%
    -------------------------------------------------------------------------
    Winnipeg              143,700        145,943        144,614         -0.6%
    -------------------------------------------------------------------------
    Regina                180,375        168,806        190,000         -5.1%
    -------------------------------------------------------------------------
    Saskatoon             202,500        187,000        236,000        -14.2%
    -------------------------------------------------------------------------
    Calgary               252,344        245,756        285,033        -11.5%
    -------------------------------------------------------------------------
    Edmonton              203,833        199,167        226,000         -9.8%
    -------------------------------------------------------------------------
    Vancouver             424,000        406,500        450,750         -5.9%
    -------------------------------------------------------------------------
    Victoria              275,000        260,000        295,000         -6.8%
    -------------------------------------------------------------------------
    National              236,612        231,526        246,490         -4.0%
    -------------------------------------------------------------------------

    The Royal LePage Survey of Canadian House Prices is the largest, most
comprehensive study of its kind in Canada, with information on seven types of
housing in over 250 neighbourhoods from coast to coast. This release
references an abbreviated version of the survey, which highlights house price
trends for the three most common types of housing in Canada in 80 communities
across the country. A complete database of past and present surveys is
available on the Royal LePage Web site at www.royallepage.ca. Current figures
will be updated following the complete tabulation of the data for the second
quarter. A printable version of the second quarter 2009 survey will be
available online on August 7, 2009.
    Housing values in the Royal LePage Survey are Royal LePage opinions of
fair market value in each location, based on local data and market knowledge
provided by Royal LePage residential real estate experts. Historical data is
available for some areas back to the early 1970s.

http://newswire.ca/fr/releases/archive/July2009/07/c4373.html

reviewed by Moishe Alexander, CFC CEO