“For most housing types, prices have increased slightly from where they were a year ago,” said Ken Shearer, a broker with Royal LePage Noralta Real Estate, in a release. “However, we are currently witnessing a levelling off of prices after the quick recovery that began in 2009 and continued through until the spring of this year. To put it in simple terms: prices fell last year, rose quickly through spring and summer of 2010, then dropped back down.”
Price differences varied by neighbourhood and home type. Clareview, for example, saw an average detached bungalow fall 9.1 per cent to $250,000 year-over-year but a standard two-storey increase by 22 per cent to $360,000.
In Clareview a standard condo dropped 11.1 per cent to $160,000. In Riverbend/Terwillegar, bungalows increased on average 15.8 per cent to $440,000 while the average two-storey rose 11 per cent to $390,000. Prices for all housing types remained flat in St. Albert.
Phil Soper, chief executive of Royal LePage Real Estate Services, said that while annual price growth was slightly lower than five per cent in the last quarter, it’s basically in line with that level when factoring in a lower rate of inflation.
In the early part of this year and latter part of 2009, double-digit price growth, year-to-year, was the norm. The Canadian Real Estate Association recorded a surge of more than 20 per cent in October 2009.
These strong gains, as the economy was rebounding from recession while enjoying historically low interest rates, had some fearing Canada was experiencing a housing bubble.
“A few weeks or a few months of unusually high period-over-period price increases after a recession is completely normal,” Soper said. “And it’s no bubble.”
The Royal LePage report is the latest showing the Canadian housing market in stable territory.
CREA recently reported home sales rising in September for the second straight month. Prices of homes sold through the Multiple Listing Service (MLS) were flat compared with a year earlier and ahead 1.9 per cent from August.
And Statistics Canada recently said that new-home prices in August were up 0.1 per cent, even as most economists expected a decline by as much.
However, despite the positive trends of the Canadian housing market, many analysts have warned against looking to housing as a primary, long-term investment strategy, and are instead recommending diversification.