TORONTO (Reuters) - The period of big rises in Canadian home prices has ended and appreciation in the second half of the year will be more moderate, the country’s leading real estate broker said on Thursday after reporting a jump in prices in the second quarter.
Gains in quarter mask signs of a moderating market, said Phil Soper, president and chief executive of Royal LePage Real Estate Services. He said price appreciation will slow in the second half of the year, but the average price of a Canadian home will still record a 7.7 percent gain in 2011 over 2010.
The average price of a detached bungalow was up 7.5 percent in the second quarter to C$356,625 ($371,484) from a year earlier. Over the same period, the price of a standard two-storey home rose 6.1 percent to C$390,163, while the price of a standard condominium rose 3.5 percent to C$238,064.
“While the global economy struggles to find its footing, here in Canada we are seeing indicators of a return to long-term norms,” said Soper, adding that an improving job market will support the housing market from now on.
“Looking ahead to 2012, signs are pointing to stability for Canadian home owners and new buyers. We believe we are past the period of peak house price appreciation.”
The third quarter is usually a slower period for housing sales, and Royal LePage predicted that this year’s final quarter will see flat year-over-year price performance compared with the unusually strong fourth quarter of 2010.
This view is in line with forecasts from economists that the housing market -- the sector that led Canada out of recession -- will cool in coming months because of tighter mortgage rules and higher borrowing costs.
Royal LePage said prices climbed across most regions in the second quarter, but that a continuing surge in Vancouver was “an anomaly” in a moderating trend. Average prices for detached bungalows and standard two-storey homes in Vancouver in the quarter were both more than C$1 million and had double-digit year-over-year gains. The average price of a standard condominium edged up just 2.5 percent, however.
Calgary, notably, was one of the key markets that declined modestly as it continued to adjust after a housing boom in the middle of the last decade.
Reporting by Ka Yan Ng; editing by Peter Galloway
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