Real estate brokerage Royal LePage is forecasting "steady, yet moderate growth" in the Canadian residential property market in 2008. -
Royal LePage predicts house prices nationally will rise by 3.5 per cent to an average of $317,288 next year. The number of transactions is forecast to slip by four per cent to just over half a million - still above the number of sales in any year before the record pace of 2007.
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Royal LePage Real Estate Services president Phil Soper says Canada's housing market should continue to thrive on strong economic fundamentals including high employment, solid consumer confidence, modest inflation and a relatively low cost of borrowing.
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Soper notes that Canada is in one of the longest housing market expansions in history, but in 2008 it's likely that eroding affordability will reduce demand, "allowing the market to move toward balanced conditions, with lower levels of price appreciation, and fewer homes trading hands."
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Royal LePage predicts next year's biggest percentage price increases will be in the most affordable big urban markets - Regina and Winnipeg.
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In Calgary and Edmonton "the excessively fast run-up of home values in 2006 and the first half of 2007 priced people out of the market," and increases are expected to be more moderate in 2008.