هنا لندن-London home prices still skyrocketing, new study shows

2018-07-22 03:02:38

أخبار 0

333

Edmonton's housing market inventory was at a 10-year high in the second quarter of 2018, Royal LePage says. Ed Kaiser / Edmonton Journal

The real estate company’s survey of housing statistics in the city shows that overall prices decreased in the second quarter of 2018, with the aggregate home price dropping 1.4 per cent year-over-year to $377,218.

Edmonton home sale inventory at 10-year high

Two-storey homes reserved the most value, falling just 0.7 per cent year-over-year to $436,722, while bungalow prices went down 1.5 per cent year-over-year to $369,100. Condo prices decreased 5.3 per cent year-over-year to $223,787.

Dinani said those choosing to do it that way make a large profit when they do sell their condo down the line — making it more affordable for them to jump to the next tier of housing.

This kind of a surplus hasn’t been seen since the 2008 global financial crisis, the company said.

The overstocked market may be the result of new stress test rules for mortgages imposed by the federal government, said Royal LePage Noralta Real Estate broker and owner Tom Shearer. The rules, which came into effect at the beginning of 2018, require applicants to prove they could still afford their mortgage if interest rates were to rise.

“What happens when a major rule change comes through, which I think we’ve just gone through, is the market takes time to find its new equilibrium. Eventually that happens,” Shearer said in a telephone interview Monday.

A new Royal LePage survey said that the affordability gap between the two is shrinking, and people are making the most of it.

Shearer said that while Edmonton’s current buyers’ market is a “sign of the times,” sellers shouldn’t despair.

The affordable housing crisis in Metro Vancouver has continued to push people eastward and beyond when looking for a home.

“Sellers just have to be super competitive in pricing their homes. There’s no room for error in overpricing a home,” he said, adding that homes that sell well and do not challenge the market are getting offers. He said buyers have “high expectations” and, with the high level of inventory, they have an opportunity to shop around.

The company forecasts that by the end of the next quarter, prices will have increased by one per cent.

“The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018,” Soper said in a statement. “We face shortages in our major cities, with many more people looking for homes than the market has available for purchase or rent. Upward pressure on prices will likely return to most markets this quarter.”

Across Canada, growth in housing prices slowed but continued as the Greater Toronto Area market softened, with the aggregate price of a home in Canada climbing two per cent year-over-year in the second quarter of 2018 to $613,968.

Royal LePage data from 63 of Canada’s largest real estate markets found home prices increased two per cent year-over-year to $613,968 in the last quarter. The price tag of a two-storey house increased 0.8 per cent to $720,504, while bungalows climbed 1.8 per cent to $512,979 year-over-year.

Compared to the rest of Canada, Shearer said Edmonton remains a comparatively affordable place to buy a home.

The median London home price rose nine per cent year-over-year to $365,686 in the second quarter of 2018, according to the Royal LePage house price survey and market forecast released Tuesday. The median is the midway point between the lowest and highest prices; it is not the average.

Royal LePage said its survey provides information on two-storey homes, bungalows and condominiums in 63 of Canada’s largest real estate markets. It bases the housing values used in its survey on company data, as well as data and analytics from a sister company.

When it comes to specific kinds of housing, the median price of a two-storey home in London increased nine per cent from the same period last year, to $404,520. The median price of a bungalow rose 13.6 per cent, to $318,734.

A new Royal LePage report says inventory levels are at a 10-year high across the city and home prices fell by 1.4 per cent since the same time last year.

The city is among others in Southern Ontario – like Windsor, Niagara, St. Catharines and Kitchener-Waterloo – that experienced double- and high-single-digit increases compared to the second quarter of 2017.

"Right now more than ever in the last 10 years we have a great opportunity to get a great house at a really fair price," said Edmonton Royal LePage Noralta broker Tom Shearer.

“We are still experiencing a shortage of listings in London, which is putting upward pressure on prices in the second quarter of 2018,” Royal LePage Triland Realty broker Peter Meyer said in a statement.

Condominiums had the largest decline, falling more than five per cent to $223,787 since the same quarter last year.

“London is one of the most affordable cities in close proximity to the Greater Toronto Area and attracts baby boomers who once lived in London to return to the region.”

Shearer said the new federal mortgage stress-test rules meant to cool hotter markets in Toronto and Vancouver have slowed down the Edmonton market.

"A lot of people who were investors or second time home buyers just couldn't get the financing they were able to before."

Moving into the third quarter of 2018, housing inventory is expected to increase in the city while sales are expected to stay steady.

Shearer said there's a nearly $100,000 "expectation gap" between what sellers want for their homes and the number of financing buyers are qualifying for.

Home transactions in Edmonton have fallen about 10 per cent since last year, adding to the amount of inventory available in the city.

The slower price increases aren’t likely to last through year’s end, Royal LePage president Phil Sopher said.

"There are lots of opportunities to get the property you want and to be able to negotiate favourable terms if you're a buyer," he said, adding that sellers are settling for 4-5 % less than asking price.

"In stronger markets, sellers are able to negotiate within 1-2 per cent below what their asking price is."

Shearer says home improvement shows have made buyers more savvy, so it's up to sellers to be more competitive with asking prices, especially in this kind of market.

"The buyer isn't necessarily saving a ton of money in their purchase, but they're buying perhaps a better house than they could have picked up before," he said.

Royal LePage is predicting the national home price will rise in the third quarter by about 1.9 per cent.

"My feeling is we're going to remain relatively flat for the rest of the year," he said

"When you see migration start to turn back towards Alberta, I think that's when we'll see sales increase and have a busier marketplace."

Tanara McLean is a producer and journalist at CBC Edmonton. Tanara grew up in Red Deer and has spent her entire career in Alberta, working in print, radio and television.

It is a priority for CBC to create a website that is accessible to all Canadians including people with visual, hearing, motor and cognitive challenges.