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Canada's housing market both vigorous and stable
+ Z" o+ R* @) f1 _4 y
7 m2 H% f& e4 R9 S2 V3 g- Country's market poised to show growth throughout 2006 -+ s' [- b3 ?2 s9 j9 {
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TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market* d1 v- @ I: Q7 M$ O ]0 b y
exhibited moderate price increases and stable unit sales during the third
. v5 ~4 |, J5 _" F9 iquarter. Wide regional variances continued to be the dominant characteristic
# D8 `9 L; P1 d7 [9 ^& `in the market, exemplified by frenzied levels of activity and double digit
' C* g% w+ a8 \price gains observed in the energy and commodity rich Western provinces, and* v5 n' w4 P7 y1 r3 d. |1 s& ]
more reasonable sales volumes and moderate price appreciation in Ontario,
; X' a# C% |7 |/ j5 w% {" g! rQuebec and Atlantic Canada, according to a report released today by Royal
; @$ {' O$ ^: rLePage Real Estate Services.( z/ A8 j8 G/ p+ H; E% k/ u3 B
1 E y' `# b, K
Nationally, market trends established through the first three quarters
- h ~5 _& ^8 T( hare forecast to continue for the remainder of the year. Robust economic
: R! v( M/ l# E- @( Q0 l" Econditions, low unemployment rates, modestly growing salaries and wages, and; F; u7 e* ~- j
sound consumer confidence contributed to the overall strength of the
1 C4 n" P0 Z1 H1 p5 |1 B1 i9 bresidential real estate sector.
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Of the housing types surveyed, the highest average price appreciation4 c# O2 ? I# d' F
occurred in detached bungalows, which rose to $300,365 (+16.3%)2 L6 \- H' a" `( `3 o* S! g
year-over-year, followed by standard condominiums, which rose to $211,5629 \$ s4 R! H9 g1 T8 k7 Q
(+14.2%), and standard two-storey properties, which increased to $365,3802 N) b* {7 Z" A! Z& p5 w% `% J
(+13.2%).
5 g7 F9 ?0 k/ B9 ]3 ~7 Z2 m5 p5 w3 \
"Canada's sturdy housing market continued to demonstrate steady growth
* G$ r6 @3 R& I) p, B; Bduring the third quarter. For all but the west, we have moved on from the& B: E8 H$ z4 x( j$ }
frenzied expansion that characterized the first half of this decade, and are
; C7 l, Y* V" B3 spoised to show continued growth at a more moderate pace," said Phil Soper,, l' \ q( c# }& s: u
president and chief executive officer, Royal LePage Real Estate Services.
% K" S' j8 M9 B, x"Gone is the sellers' market that we have lived with for some years. We
: Y. V: O0 x. w& z0 Fwelcome the more reliable conditions that are characteristic of a healthy- l& B" Z+ k0 q' a+ p! j
balanced market.". I2 R4 `" C6 p# i
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Despite the double-digit rise in average national house prices,
6 U5 U# q5 v9 P* [3 d( {- w# Aconsiderable regional variances were exhibited again this quarter. The shift
2 g( J. g6 |! U3 j# g1 gto balanced market conditions, which began in late 2005, has continued: e3 x* }6 I% j3 W {0 V
throughout most of the Central and Eastern regions of the country. In the core
/ h+ O! e. V" e; {' ]1 _- s3 genergy producing western provinces, the combination of very high in-migration,
: Y) |5 r3 Y6 X; e& @, kmanageable affordability, and a shortage of inventory has driven record
( \! w. ~& O' I& u. \9 gbreaking price appreciations.
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7 W7 E; h3 Y- g* ]6 w1 r Echoing the second quarter and supported by Alberta's rapidly expanding8 I" W N- D7 v. C( `; {% v) g
economy, Calgary and Edmonton led the charge of Canadian cities with the
6 e3 Q$ k/ b+ K, L% Z h: z6 xlargest house price appreciation in all housing types surveyed.: I1 ~, _% t8 M7 E3 D0 Q' }# I
- ^$ y, M8 o" L In Ottawa and Toronto, growth remained steady, supported by solid
1 I! A# M5 q/ geconomic fundamentals, an increase in available inventory and strong consumer. ~; h' ^/ T* S j$ d1 y# ~* h
confidence. While the pace of price appreciation in Ontario leveled off: [& ^5 j5 L8 _2 F1 {
slightly, the province's real estate market remains poised for modest growth." @: b5 n, h! o; q
In Atlantic Canada, new housing and condominium construction offered buyers
' {& P" T/ B" P6 Igreater selection at more competitive prices, resulting in a slower rate of4 I6 r. L7 w8 b6 g# F/ A* j0 C0 z
price appreciation when compared with 2005.% `# o6 A9 B9 x5 j; {- ^' }9 F9 i; A
1 {0 ?4 k! F; S+ T While the pace of growth in Canada has slowed, the domestic housing
; d) E) r1 i, T% ]market is expected to outperform the American market. The economic and
0 i' c& E* F' p& X5 Y4 gfinancial fundamentals driving the residential real estate sector in Canada5 o7 P5 u6 c' a8 C! Y. K
are markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the
7 z# A7 o1 F/ \& lAmerican market through 2007. A number of factors are working in Canada's0 q$ v. z. E9 R% n
favour, including healthy personal and governmental debt levels, the
# l" [$ U) }& n/ n1 ~4 jrelatively modest rise in interest rates in our country, and general
4 i3 q- Z# C: i, a% t7 N" F( M( laffordability in our major cities. In addition, Americans are now seeing the. [1 [' Z& y' i! v
downside of a tax system that encourages maximum homeowner leverage, and
+ u1 _ ^, S9 t9 Naggressive financial products such as zero- and negative-amortization
( H# b& e" r) c" ^mortgages that work only in a high price growth environment."
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, G2 l* D5 X1 M! k5 v5 C REGIONAL SUMMARIES& e/ G+ [1 g7 n6 X
>>
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- w A; I9 Q6 p0 C$ ^8 Q! v. n! h Balanced conditions continued to characterize the housing market in
; Y1 R5 T E% E" f( }Halifax, as significantly higher inventory levels helped to moderate the rate
* v7 M1 h0 _; P1 J4 ]1 }% Vof price appreciation. Buyers were increasingly choosy, taking more time q1 E; d% i& s6 N3 ?
looking for newer, low-maintenance properties that were not in need of
& g- ^; H# {$ _renovations.
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8 _ u2 m ~* B7 O+ s The housing market in Moncton remained healthy and strong as a slight
; {5 E0 H- ] oincrease in inventory helped to moderate the rate of price appreciation9 y) K; \8 b7 N
compared to the same period in 2005. Activity was brisk throughout August and- T, c0 T& H* X
September and is expected to remain this way through the fourth quarter.* U3 K$ I$ ]. v1 a3 Z' N& A. |
* k& I: j, E& t: P* b The housing market in Saint John underwent its traditional summer
) e- ^3 q% b% i$ V$ b8 \9 ~slowdown in the third quarter, with activity picking up towards the end of the
$ d# s4 q& [2 }$ }. @! X. equarter. The local economy continued to thrive, as construction on a new
, O9 J+ \; w- X% @600,000 square-foot shopping area has begun, bringing several new box stores( u: l0 T+ R; |" s
to the area. Buyers have begun seeking less expensive fixtures for their homes
; \# O3 x8 \* T! f/ Rand are instead opting for more affordable housing options., R5 }+ N7 v& P* }
4 l5 q: z( c2 o" i' D, \& U8 f/ { In Charlottetown, the housing market started to move towards balanced5 B1 e0 R. n+ i" i
conditions, as some sellers had to begin to lower the asking prices on their
% o; H1 q! n/ C9 B% O8 Jhomes to make them more competitive. Activity from out-of-town and US buyers
8 G5 ^; H. |6 q8 X9 i& ^4 ewas down slightly compared to 2005, likely attributable to the strong Canadian7 E' e8 \9 y; U, O) `
dollar. Inventory levels began to creep up in the third quarter, providing' B2 X9 E z, G9 V3 r
buyers with more options when looking for a home.9 s, V6 {9 x: h, g
; i2 W9 K- q* Q" @" j: `! ? Activity in St. John's slowed slightly in the third quarter, particularly
$ j" B( J e2 ]2 z3 Uamong higher-priced properties, where there was a slight over-supply of homes
8 |( P3 Y6 K; [" T" Rpriced over $200,000. Listing periods have increased when compared with 2005,
' ^; ~* Y: e1 J( j' I# y0 kas some of the pent-up demand that had characterized the market over the last5 G1 u$ y2 {1 y% m$ q6 X
few years has been satisfied, resulting in more normal, balanced conditions.
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: V% l8 C4 R! h A& B4 ?1 c+ b# y4 }' V Montreal's housing market recorded modest increases in average house
' _( i: X. t# N& M3 q" Dprices, due to a slight seasonal slowdown in the third quarter as inventory
+ ~' \% p+ P& H- D& jlevels rose. Part of this can be attributed to the fact that many renting+ H$ O& K. F* `. {& [7 D0 t
first-time buyers were motivated to close on the purchase of a home by July 1,
/ y1 P5 m* h- s$ p! `) J B9 ewhen rental leases expire in Quebec. Once this date has passed some of the
7 R2 ~7 T4 v, N2 a$ s Q/ Q7 @pressure is taken off the market, allowing buyers to visit more homes before
& k" r; X# O' t) Nmaking a purchase.: d J2 ^+ j o7 a2 O5 f8 G
8 h4 n; Y6 o$ C- _) }* }( T% L4 R
Ottawa held its position as one of the country's most stable housing2 _- _. u' s N9 m/ _
markets in the third quarter, reinforced by a vibrant local economy and strong
% v3 R" `0 c: Hconfidence, resulting in modest increases in average house prices. The city
% P$ U: P! g8 p4 U! \centre remained a bright spot in Ottawa, with homes in this area attracting9 c) v7 \- }' K# V! |+ { A
attention due to their convenient location and proximity to downtown
, J: m! K+ S+ P! [8 K9 gamenities.3 v8 S, K: Y% ?% `, f
$ I! ^' q5 M/ W$ X The housing market in Toronto sustained healthy activity levels
" V! o0 o. u$ f2 `throughout the third quarter, as a strong economy helped to maintain demand
9 A( B" Q" u2 X2 \5 \across the city, causing average house prices to rise moderately. Toronto has& H0 ]# H. n) H7 |6 f4 \! u8 H2 k; n2 }
continued to experience modest growth in average house prices, and has been$ V! m2 Z P7 y
driven primarily by purchasers who are buying homes as their principle! O3 t( D- u! ~/ T7 L$ B
residence, rather than for investment.
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The vibrant Winnipeg housing market continued to show its strength as. `' J$ u0 J! u
house prices rose during the third quarter. The booming local economy resulted. j% ]/ ~# W# |) s3 u4 T9 t- F3 k
in a historically low unemployment rate, helping to bolster consumer. K) [: _3 F2 A% t# ]
confidence and Winnipeg's ranking as the city with the lowest capitalization% D" ]5 p& N& J
rate among the country's larger cities - helped to encourage buyers to enter) `% {/ n2 I0 m8 `6 o/ i
the market.
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In Regina, the market experienced a slight seasonal slowdown through
: w5 y) U- \# I+ j6 g6 jJuly, as there were fewer purchasers in the market due to summer vacations. In* @- T- ~3 i% ] |( N9 b+ R& [
August, activity resumed to the busy pace previously seen in the spring
& ^# L8 q1 T3 M* Z' kmonths, as the influx of purchasers made it more difficult to find a home due6 J) r2 g4 S2 q5 ]* L
to the shortage of available inventory.
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Activity in Saskatoon remained brisk as the market maintained its
5 n9 k( |4 Z/ n9 G+ g- R, ^% cmomentum from the busy spring sales period. The economy in Saskatoon remains3 n$ E) [: u/ B
vibrant, as employment opportunities are abundant with many businesses4 e" X/ r' ^" P m/ }
struggling to make hires and having to recruit outside the province.
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Calgary's housing market recorded blazing average house price increases: F$ |0 P' d- [; S" r7 {
in the third quarter, in all surveyed categories. The burgeoning economy, low/ ]: d3 K! d# H, j; C* s
unemployment rates and low inventory levels remained the leading factors that
: { h6 J6 x4 tpressured Calgary's house prices upwards. However, regardless of the soaring
5 }; E* t2 X2 Pprices that characterized the market - even during the typically slower summer5 R6 M6 Q: M+ ]% N
season - it is expected that activity will become slightly more balanced, as+ D8 g: x# k" t' H: l' v2 a/ R4 B. |
buyers are becoming more reluctant to participate in the frenetic activity. w* Q8 ]/ u8 d: D) ]
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Edmonton's booming local economy continued to thrive in the third quarter
2 R' O3 k/ M4 ias activity in the oil sands north of the city continued to flourish. Edmonton9 Q3 K0 |9 S; B( j" ?: Q w6 R
remained the hub of activity for those coming to work in the oil industry,4 t+ |6 \! C m% F& f) w
maintaining tight inventory levels across the city, resulting in prices2 y2 v% K/ ?% v2 \
increasing at record levels. However, as inventory levels continued to improve$ I8 @0 b& z3 ~, `* s
in the third quarter the rate of price appreciation should moderate slightly
. h5 V! c# n) Y& [towards the end of 2006.
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While Vancouver has seen a slight reprieve from the severe shortage of: `6 N7 S6 N" `/ m% P0 D& O( ^9 R7 x
inventory that had previously characterized the market, supply is still unable; t& E7 z \6 A% ^/ V
to meet demand, driving house prices upwards. Vancouver has a very diverse
5 X. K: R6 R! vgroup of active buyers - from first-time home buyers to baby-boomers to
% Y4 ~" t1 ~! M9 |$ rforeign investors - all of whom fuel the demand for houses, placing added
1 [, B. U6 L6 x) p; vpressure on tight inventory levels.3 T1 w+ ~: w0 }' {9 u. `; e7 S" w+ t0 z
% p+ d! Y0 f N8 x# {) } Victoria's market is vibrant and supported by strong economic
' ], ^1 a2 [8 i5 Gfundamentals, fuelled by a booming tech sector and a migration of young people4 X/ P% o, ^5 Z* V* X- e
into the city that has continued to support the area's house price increases;
. k7 l. H. L" d3 ^: ^9 A$ [' \while increased inventory levels have afforded buyers more time when searching
3 I6 L+ d* B# a- z4 kfor a home, helping to normalize the market's pace.
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$ g' Y% v- N' Q <<
- B- M' ~1 x5 Y" J2 q Survey of Canadian Average House Prices in the Third Quarter 2006
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-------------------------------------------------------------------------# a! v1 z9 [7 g' y/ Z. [4 ?
Detached Bungalows Standard Two Storey0 Y# Q6 N9 g% T3 |6 _! _8 K' J! A
-------------------------------------------------------------------------
; w( w' ?% j6 k5 p 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
: t, T2 }( l, o% p9 p Market Average Average % Change Average Average; A7 H( L( o" U5 r. I* T) {! g
-------------------------------------------------------------------------
) r) h4 e3 ?$ H Halifax 186,333 173,333 7.5% 198,667 199,000
$ n3 K4 `# M; e2 W$ x8 [4 y# s -------------------------------------------------------------------------5 n9 F' b3 q3 k6 w! b8 g* j. w" N
Charlottetown 145,000 141,000 2.8% 175,000 170,000
j: s! F" Q0 c! W0 j3 n ------------------------------------------------------------------------- m% M- c# H0 u
Moncton 135,000 127,000 6.3% 129,000 123,000 {* G, n* E9 B; R) m" _& D) ^
-------------------------------------------------------------------------3 D' ~5 ^3 {- E: c$ m6 i& Z
Saint John 141,200 142,900 -1.2% - -
7 ], H I6 m7 e1 A5 v -------------------------------------------------------------------------
% v& X2 a/ X$ |; _4 B3 z St. John's 143,667 142,667 0.7% 200,667 202,333
+ e5 f7 Q% U2 R! b+ W -------------------------------------------------------------------------( T7 D' G2 @2 P
Atlantic 150,240 145,380 3.3% 175,833 173,5836 R: A+ G! J8 q t1 V8 `, ^; v
-------------------------------------------------------------------------# {8 ^& a" j4 X |. r( a2 U: l
Montreal 213,691 203,500 5.0% 321,141 316,185
% J" p: A* ^+ y6 R -------------------------------------------------------------------------
4 p$ S5 z6 D5 g1 m* N( k" |* _ Ottawa 290,083 278,417 4.2% 285,667 273,250! m2 G/ Y: g' [& V7 P* n3 a+ }
-------------------------------------------------------------------------
$ w( D* C& q8 i1 X3 T& D Toronto 373,368 355,882 4.9% 481,523 474,7666 _9 ~ F; K o. K, i
-------------------------------------------------------------------------
: Z6 T( t' X$ X+ O' Z0 s Y/ ~ Winnipeg 181,579 159,860 13.6% 202,337 180,707
5 [' G$ k1 ~2 w* v ]# a/ j -------------------------------------------------------------------------
( A$ i$ x, d+ U Saskatchewan 170,667 156,083 9.3% 182,600 166,500! L* @7 m: ] p& l
-------------------------------------------------------------------------
) D4 H, `" j5 e1 Z2 u+ `" F/ [. d( t Calgary 395,067 252,411 56.5% 405,778 264,3895 c" [, W1 I0 Z. v
-------------------------------------------------------------------------
- r" i$ `; G$ n) m) W Edmonton 286,857 194,857 47.2% 316,429 206,714
7 ]+ C3 y7 {! N0 d4 c# I& B r -------------------------------------------------------------------------* F6 c6 c9 n( H$ [ k6 d ]5 s# P# w
Vancouver 704,250 601,000 17.2% 794,000 697,500; g r' c0 B8 b+ p. ~; B4 j; p
-------------------------------------------------------------------------! S! L0 ~' t$ r8 {! _
Victoria 375,000 348,000 7.8% 403,000 391,000
5 \# T/ ?0 L Q& R- {5 K -------------------------------------------------------------------------! y5 f; [9 z* }- D( s
National 300,365 258,202 16.3% 365,380 322,860
, g* }7 G1 H7 v5 ]# I7 a: w -------------------------------------------------------------------------7 y6 i$ r" S$ Z
% M( P) T& ]% q -------------------------------------------------------------6 n- K9 J# B3 d" Q9 u8 e
Standard Condominium
1 V9 ]9 U8 L l' B% X s$ \ -------------------------------------------------------------
" ~9 g% u L! k8 s1 N. g( t 2-Storey 2006 Q3 2005 Q3 Condo
" `( T( x3 ~( n% @ Market % Change Average Average % Change+ C1 l+ g: k$ Y n1 q1 d- T% V
-------------------------------------------------------------8 Q# _7 C9 Z7 j- G: S5 R9 \' I0 s( w
Halifax -0.2% 142,000 103,000 37.9%4 b! v$ H8 I1 O1 @
-------------------------------------------------------------
$ w2 H, _% N3 K Charlottetown 2.9% 98,000 98,000 0.0%
- j$ {/ T9 F' V; K( }+ I, B. O7 x -------------------------------------------------------------
9 K: c! H+ C) ~: W: R Moncton 4.9% - - N/A4 k* E, K! B J( }$ ~2 j
-------------------------------------------------------------& v# \) z7 U t& r8 C4 g
Saint John N/A - - N/A7 _: n( y, K' R# A3 O1 q4 f0 M) x
-------------------------------------------------------------
o( R4 d( p( o2 J3 t St. John's -0.8% 146,333 145,667 0.5%/ U0 Z7 L( @6 w- `
-------------------------------------------------------------
8 N/ k' x; q' Q/ g1 Z Atlantic 1.3% 128,778 115,556 11.4%
1 _8 {% u. ?$ d: K K4 a% P7 K# k -------------------------------------------------------------/ b% X7 q- ]% z z7 A+ o9 q- n
Montreal 1.6% 193,190 188,016 2.8%# V j |7 ? v- C" z n! [
-------------------------------------------------------------6 Q- i$ }( t# l/ C! k ?1 W$ F
Ottawa 4.5% 181,083 172,250 5.1%! _& {3 X; }# \ I+ G0 J2 ?* F
-------------------------------------------------------------
3 x3 q3 e& ]* a& p6 H. S2 q) J Toronto 1.4% 252,088 242,918 3.8%) t+ J2 q* S9 B" h! W4 P% ^, H2 |' a
-------------------------------------------------------------
+ e$ n H; x4 [- m" @ Winnipeg 12.0% 105,648 96,008 10.0%9 q* x( S$ \# N( }6 g
-------------------------------------------------------------! j' F1 z: Y5 g% e l. E
Saskatchewan 9.7% 106,250 101,000 5.2%
0 l1 U+ ^) N# d: q6 T \# d -------------------------------------------------------------
# K2 [1 b$ G$ e; V9 [ Calgary 53.5% 245,844 153,867 59.8%) X8 N, G) Y) ]8 F, a0 B
-------------------------------------------------------------0 n( Q" S) O+ t
Edmonton 53.1% 200,433 131,500 52.4%
& @) I6 J H5 ? -------------------------------------------------------------, E& F3 k6 {7 g( I8 Q; Z- d
Vancouver 13.8% 366,250 323,250 13.3%" Q C d. t7 x
-------------------------------------------------------------
* Q) H5 z* \* k- W Victoria 3.1% 229,000 220,000 4.1%$ B" I* q5 Q! e: V$ z, g P
-------------------------------------------------------------) a" O4 r: G1 u- o7 c
National 13.2% 211,562 185,296 14.2%
: x5 i" u1 l' ~ -------------------------------------------------------------$ p- a. T# m+ P
>>
9 u4 ^+ T: K/ T8 I7 [& H$ k
! i: B% X7 \) T6 ~3 K4 B2 n Average house prices are based on an average of all sub-markets examined
8 y# d, m6 n! U) k$ |0 din the area, except for the smaller markets of Charlottetown, Moncton, Saint; c: O* O( d/ X2 d N
John and Victoria.( C b7 \5 ~ a @
; b) v) m6 E6 H The Royal LePage Survey of Canadian House Prices is the largest, most
1 U( m5 B4 I2 j# n' Hcomprehensive study of its kind in Canada, with information on seven types of
; N- P/ ?& L9 g* Rhousing in over 250 neighbourhoods from coast to coast. This release, V- I. p) b9 Z3 p" w
references an abbreviated version of the survey, which highlights house price/ `9 l% L1 v3 Y. v5 r
trends for the three most common types of housing in Canada in 80 communities
. z! I: q# P3 X! A. z% xacross the country. A complete database of past and present surveys is
$ x( V, U0 z2 K4 g3 I/ e7 z' gavailable on the Royal LePage Web site at www.royallepage.ca, and current. o9 a9 r) e( @5 e# e2 D
figures will be updated following the end of the third quarter. A printable1 K% T1 y0 Y2 ]# l' v* n
version of the third quarter 2006 survey will be available online on
n. w ~9 N0 U; INovember 15, 2006.
" Q2 s$ k$ T5 t" A1 \/ \ Housing values in the Royal LePage Survey are Royal LePage opinions of9 K4 D' ^8 a6 A
fair market value in each location, based on local data and market knowledge0 m8 e$ _: c5 J- k$ E+ H" f
provided by Royal LePage residential real estate experts. Historical data is& s' s& f/ j1 W. o1 V/ d. {
available for some areas back to the early 1970s. |
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