Home prices to rise by 1.5% in Q4: Royal LePage

After a third-quarter increase, Canadian home prices are expected to keep rising in Q4, a survey from Royal LePage says.

Home prices are forecasted to increase by 1.5% over the next three months, the survey says.

“Positive economic fundamentals, supported by a new agreement on trade, should bolster consumer confidence across Canada and stoke demand in the nation’s real estate market,” said Phil Soper, president and CEO of Royal LePage, in a statement.

“Dangerously overheated regions have cooled considerably this year, while home prices have remained remarkably resilient. This is the soft landing that policy makers were hoping for.”

National home prices rose by 2.2% to an average of $625,499 in Q3 mainly because of an increase from the Greater Vancouver Area (up 3.9%), the survey compiled from proprietary property data in 63 large markets says.

The Canadian Real Estate Association said Monday that the national average price for a home sold in September was just under $487,000, up 0.2% compared with a year ago.

The Greater Montreal Area saw prices rise 5.4% year over year in Q3, the highest increase among Canada’s three largest metropolitan areas, Royal LePage says.

Prices were almost flat in the Greater Toronto Area from the previous year with aggregate prices falling 0.4%, led by declines in suburban prices. Prices in the City of Toronto rose by 5.2% while prices fell in almost every suburb except for Mississauga.

By the end of the year, Royal LePage expects the aggregate price of a GTA home to rise to $853,097, up 2% from the third quarter.

Soper said the GTA is emerging from a housing correction, with new mortgage stress tests bringing down suburban prices, in particular.

“Quarter-over-quarter trends are pointing to the end of this correctional cycle and the beginning of a modest recovery in the region,” he said.

Median home prices in Canada rose in Q3 year over year to:

• 1.4% for a two-storey home to $736,337;
• 1.5% for bungalows to $519,886; and
• 6.7% for for condos to $441,240.

Royal LePage forecasts prices to increase by 0.7% in the Greater Montreal Area to $399,679 in Q4. In B.C., it says double-digit price increases will no longer be the norm because of the mortgage stress test and provincial tax policy.

Read the National House Price Composite here.

Staff

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