Home-sales frenzy to ease off in 2004

Thursday, November 27th, 2003

Ashley Ford

Vancouver again will hold the dubious title of having the most expensive housing in Canada next year, with prices expected to increase by five per cent, Royal Lepage says in its latest housing forecast.

But, the national real-estate company says the city won’t have the fastest growing prices in the country.

That honour will fall to Ottawa where they are expected to rise by 6.5 per cent, followed by Edmonton at 6.1 per cent.

Nationally, prices are expected to rise 3.2 per cent to an average of $210,500, compared to Vancouver‘s average $361,000, the survey shows.

However, says Bill Binnie, president of Royal LePage Northshore Vancouver, the frenetic selling pace gripping the housing market here will ease next year.

“Prices will begin to level out as affordability becomes an issue for an increasing number of buyers,” he said.

Overall, sales are expected to dip by 2.1 per cent next year to 38,000 as average prices creep up to levels beyond the reach of price-sensitive buyers.

“Unfortunately many of the rising costs we see on the Lower Mainland we can do little about,” says Peter Simpson, chief operating officer of the Greater Vancouver Homebuilders’ Association.

High costs for land, labour, and building materials are all factored into the price of a home and government-imposed development costs simply exacerbate the situation, he says.

However, Simpson pointed out that consumers are more fortunate here than in other cities because there is a wide variety of housing types available from which to choose.

Bob Rennie, of Rennie Marketing Systems, says most rising costs “are stuff we have no control over. It is very hard to keep prices down.

“Despite this, there is a continuing demand for homes, especially downtown. All our numbers keep showing no inventory and next year will remain strong,” he said.

Binnie says a seller’s market will persist, primarily because of low inventory levels, especially in the condominium sector, but “the level of appreciation will be more moderate when compared with the last few years.”

The condominium sector will continue to be the market’s main driver again next year, says Royal.

The downtown core will remain highly sought after by buyers.

First-time buyers, those purchasing second or investment homes and those looking to downsize, will continue to create strong demand in the downtown, the company adds.

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– Average housing-price increases in major Canadian markets for 2004, as predicted by Royal LePage Real Estate Services:

Halifax: 1.6% to $160,000

Montreal: 4.2% to $172,000

Ottawa: 6.5% to $233,900

Toronto: 1% to $296,000

Winnipeg: 4% to $112,332

Regina: 1.7% to $106,500

Calgary: 3.2% to $225,000

Edmonton: 6.1% to $174,500

Vancouver: 5% to $361,000

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