Looking back at 2014 in Canadian real estate, it’s largely been a seller’s market. The inventory of homes has been low, the demand high, and prices going up, up, up. But Royal LePage’s latest House Price Survey reports a natural slow-down in the many of the nation’s real estate markets in the third quarter, calling it a “Goldilocks market” that is juuuuust right.
“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 five per cent,” says Phil Soper, president and chief executive of Royal LePage. “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.”
According to the House Price Survey, the average price of a home in Canada rose between 4.4 and 6.1 per cent year over year, with two-storey detached homes averaging $441,714; detached bungalows at $405,101; and condos coming in at $257,377.
Bucking the Goldilocks market trend, Calgary and Toronto prices see dramatic price increases
Low inventory after an unseasonably busy August contributed to a spike in prices across all housing types in Toronto. Standard condos saw the greatest increase, up eight per cent year-over-year to $383,039. Detached bungalows rose 7.2 per cent to $618,088, and standard two-storey homes increased 7.6 per cent to $733,317.
Meanwhile, Calgary’s market was among the strongest across Canada, where high demand and low supply brought on prices increases across the board – condominiums saw a sharp increase of a whopping 11.8 per cent year-over-year to $294,156, while detached bungalows increased 10.8 per cent to $515,844 and standard two-storey homes were up 9.2 per cent to $499,811.
Buying in a seller’s market:
If you’ve found a great home, chances are someone else has it on their radar too. Here are 3 tips that can help you conquer a seller’s market:
Tip #1: Keep your emotions in check. Combine a hot real estate market with a hot head, and you start to lose sight of the goal: to make a smart purchase and a sound investment. Don’t become a bidding war casualty. Set your budget and stick to it. A home is only worth so much, and it’s up to you to decide what that magic number is.
Tip #2: Go with a pro. Your real estate agent, financial advisor and lawyer are your essential three in the home-buying process, helping you to keep your emotions in check (refer to #1) and make a purchasing decision based on facts and figures – not feelings. Use their expertise and make a smart bid that reflects what the home is worth and what you can comfortably afford – even if (and when) interest rates rise by one, two or three per cent.
Tip #3: Get pre-approved for a mortgage. With a mortgage pre-approval in your back pocket, you’ll be locked-in at today’s low rates for up to 90 days, and when you do find a great home and are ready to make an offer, it won’t be conditional on financing since you already have this in order.