According to the Royal LePage House Price Survey* and Market Survey Forecast, Canada’s residential real estate market in the second quarter of 2016 showed the highest national year-over-year gain seen in five years. Amid continued world economic uncertainty, the historically low interest rate environment that has fueled Canada’s real estate market growth in recent years is expected to continue longer than anticipated.
The price of a home in Canada increased 9.2 per cent year-over-year to $520,223 in the second quarter of 2016. During the same period, the price of a two-storey home rose 10.7 per cent year-over-year to $619,671, the price of a bungalow increased 7.9 per cent to $437,121, and the price of a condominium increased 4.2 per cent to $348,189. Looking ahead to the remainder of 2016, Royal LePage forecasts that the aggregate price of a home in Canada will increase 12.4 per cent when compared to year end 2015.
“Our forecasting models, which pointed to a slowing housing market as the year progressed, included a modest increase in the cost of borrowing,” said Phil Soper, president and chief executive officer, Royal LePage. “Economic and social disruptions have rocked the world once again, introducing new risks and making it very likely that the Bank of Canada will leave interest rates as-is for now.”
Adding to the global uncertainty is the recent decision from Britons to exit from the E.U. Onlookers say this will drive more foreign money into the relative safety of Canada’s real estate markets,” said Soper. “We anticipate the impact, if any, will be seen in the commercial property sector and not in housing markets. That said, our research does point to increasing Vancouver and Toronto region foreign buyer activity in residential markets this quarter.”
According to a survey of Royal LePage real estate advisors working within Greater Vancouver and the GTA, 71 and 74 per cent said that year-over-year home purchases by international buyers have increased in the second quarter in the GTA and Greater Vancouver, respectively. Still, 35 and 37 per cent of respondents believe that foreign ownership accounts for less than 10 per cent of the GTA and Greater Vancouver housing markets, respectively.
To view the chart with aggregated regions and markets visit royallepage.ca/houseprices.
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*Powered by Brookfield RPS.
 “Foreign buyers” are defined as buyers who have lived outside of Canada for at least six months over the last year.  Findings are the result of a survey of 482 Royal LePage real estate advisors working within the Greater Vancouver and Greater Toronto Area (161 and 321, respectively) between the dates of July 1, 2016 and July 8, 2016.