Home-price gain reflects BC economy

A fourth-quarter report released Thursday by Royal LePage Real Estate Services said in Vancouver, the average price of a standard condominium experienced the greatest appreciation in the city, rising 15.2 per cent, year-over-year, to $276,000, followed by the average price of a detached bungalow, which increased by 12 per cent to $550,400. A standard two-storey property in Vancouver rose by 11.4 per cent to $630,600, the survey said.

"Vancouver is currently experiencing an economic boom, with a shortage of labour being the only limiting factor in the city's growth," Bill Binnie, president of Royal LePage Northshore, said in a news release. "The construction industry has been one of the most active sectors, with residential, commercial and infrastructure construction all experiencing unprecedented activity.

"Listing inventory continues to fall short of demand despite the number of new construction projects," Binnie said. "As the city continues to grow along with our economy, these tight market conditions are expected to persist for years to come."

Victoria's real estate market remained the country's leader in the fourth quarter of 2005, the survey said. Condominiums in the city continued to enjoy the highest-price appreciation with the average price increasing 30 per cent, year-over-year, to $221,000.

Nationally, housing prices remained strong in the fourth quarter of 2005 and should rise about six per cent this year on average, Royal LePage said. But the number of homes sold will likely drop, bringing the market into balance and giving buyers more clout in the market, says Phil Soper, CEO of Royal LePage Real Estate Services.

"We've been climbing this mountain. We reached the top in 2005 and now we're on a very high plateau," said Soper.

According to Thursday's report, the average price of a two-storey home in Canada rose seven per cent, year-over-year, to $327,269 in the fourth quarter of 2005.

Increases ranged from 21.2 per cent in Victoria (to $325,000), to 15.5 per cent in Calgary ($245,089), 13.2 per cent in Winnipeg, 11.6 per cent in Vancouver ($630,750), 10.2 per cent in Halifax (180,500), four per cent in Toronto ($443,737) and 2.6 per cent in Montreal ($301,181).

A sound and growing economy in Central and Atlantic Canada is fuelling moderate price increases, while demand for houses in the energy-rich West caused prices to surge, Soper said.

Soper says buying activity peaked in 2005, pushing the market into the next stage of the housing cycle this year, as the number of homes sold is expected to fall by three per cent.

(prepared by Vancouver Sun; Canadian Press)

OVERVIEW

Here are some selected average prices from the Royal LePage Q4 survey:

Vancouver

Standard condominium: $276,000 +15.2%

Detached bungalow: $550,400 +12.0%

Standard two-storey: $630,600 +11.4%

North Vancouver

Standard condominium: $241,000 +13.7%

Detached bungalow: $500,000 +11.1%

Standard two-storey: $600,000 +11.1%

West Vancouver

Standard condominium: $360,000 +9.1%

Detached bungalow: $720,000 +10.8%

Standard two-storey: $795,000 +10.4%

Source: Royal LePage