File photo of a sign outside a house for sale in Toronto.Sami Siva/The Globe and Mail
Canadian home price growth is not going to be as strong in the next while as it has been, says Phil Soper, chief executive officer of real estate agency Royal LePage.
It's a view that's shared by many economists, but is not frequently touted by real estate agencies. So it's noteworthy that in the first line of a press release to be issued Wednesday, Royal LePage says "housing prices across the country are showing signs of moderating."
To be sure, prices are still going strong for the time being.
Royal LePage's quarterly survey of the real estate market found that the average price of a condo in Canada rose 4.4 per cent in the third quarter from a year earlier, to $257,377. The average price of a standard two-storey home rose 5.5 per cent to $441,714, and detached bungalows rose 6.1 per cent to $405,101.
"In the seven years since the Canadian housing market began its recovery from the worldwide recession, home price growth has been robust, often greater than the long-term average of approximately 5 per cent," Mr. Soper states in the press release. "We are now experiencing a natural slowing in the rate of year-over-year price appreciation, with real estate markets moderating in most parts of the country, a transition to what our agents refer to as a 'Goldilocks market,' one that is neither too hot, nor too cold. To be clear, we expect home prices to continue to grow in the months ahead, but at a slower rate than we have seen in recent years."
In an interview Tuesday, Mr. Soper added that he expects prices to rise at "considerably" lower levels than past years.
"You see early indications in places like Montreal and Ottawa, where we've got low-single-digit price appreciation," he said. "Essentially, the market has flattened out and people are saying prices are fair, but there isn't the demand in the marketplace to ask another 5 or 10 per cent like Calgarian homeowners are getting for their properties right now. And I think we'll see more cities join the single-digit club in months ahead."
Calgary will likely continue to buck the trend, Mr. Soper said.
What about outright price declines? Mr. Soper sees those happening after interest rates rise, although they might be confined to the most price-sensitive markets, many of which are in B.C.
"I don't think we'll see any price retraction until there's a reset in interest rates to more normal levels," he said.