[dropcap]C[/dropcap]anadian home prices will continue to go up in 2012, although at a slower pace than they did last year, according to one of the country’s largest real-estate sales organizations.

Royal LePage, which franchises brokerages across the country, predicted Thursday that the national average price for resale homes will increase this year by 2.8% by the end of 2012.

It said the national average price for a standard two-storey home was $375,427 in the fourth quarter of 2011, up 4.2% from 2010.

“Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand — albeit at a slower pace,” said Phil Soper, the president and CEO of Royal LePage Real Estate Services.

National averages don’t tell the whole story, however, since there are wide variations depending on the type of home and location.

In Vancouver, a standard two-storey home had an average price of $1.1 million in the fourth quarter of 2012, up 10.9% from a year ago. By contrast, two-storey homes in Atlantic Canada had an average price of $200,000 or less in several cities where increases were fairly flat compared with a year ago.

In Toronto, which is usually the country’s second-most expensive real-estate market after Vancouver, Royal LePage found strong price gains for most housing types in the fourth quarter — due to a lack of available properties and steady demand.

The Royal LePage forecast came as the Statistics Canada reported the price of new homes rose again in November, led by gains in Toronto and Montreal.

The government agency’s new housing price index rose 0.3% in November, after a 0.2% increase in October. On an annual basis, the index was 2.5% higher in November compared with November 2010.

The largest year-over-year price increases in reported by Statistics Canada were in Toronto and Oshawa, Ont., where they were up 6.2%.

In 2012, Royal LePage expects that real estate values in Toronto will increase 2.6% compared to 2011 — slightly slower than the national growth rate.

In the fourth quarter, the average price for detached bungalows rose 7.2% from a year earlier to $532,137; prices for standard two-storey homes rose 4.2% to $629,188 and standard condos rose 3.4% to $347,659.

Some economists have said housing prices in certain Canadian markets, including the Toronto area, may be too high to be sustainable and are due for a correction. However, LePage said housing prices have been high in Toronto because demand has outstripped supply.

“Inventory has been a challenge for Toronto’s potential buyers throughout 2011 and this restricted supply has put upward pressure on prices,” said Gino Romanese, senior vice-president for Royal LePage Real Estate Services Ltd.

“Standard condominiums in the resale market saw a more modest increase due to a healthier supply that was created by newer units coming online. However, demand for older units has increased as they are generally larger in size and preferable to (people downsizing from houses) who are used to more space.”

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.
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