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Canada's housing market both vigorous and stable
4 v9 [# [% c2 i8 x& |! e* T! H j" o! U' N
- Country's market poised to show growth throughout 2006 -
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TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market# f- j* m9 J6 @7 d7 d" P+ X
exhibited moderate price increases and stable unit sales during the third
2 W& R* u# x# L' l9 Z5 Kquarter. Wide regional variances continued to be the dominant characteristic
& J# F% w8 J; s/ D+ `( E' Uin the market, exemplified by frenzied levels of activity and double digit) O, f' _1 h7 {* \
price gains observed in the energy and commodity rich Western provinces, and
; z1 r6 Q7 f. k+ U; o1 Tmore reasonable sales volumes and moderate price appreciation in Ontario,
9 k/ k0 L8 [" B& zQuebec and Atlantic Canada, according to a report released today by Royal
1 k( `, g7 v& r) j. GLePage Real Estate Services.
1 j# Y+ v2 H/ K1 E+ {; X8 f
% D# O# o& k6 \9 u/ u3 G7 x, w0 v Nationally, market trends established through the first three quarters7 V% [* M$ @# |2 H
are forecast to continue for the remainder of the year. Robust economic
I. l! U: t+ ?6 _conditions, low unemployment rates, modestly growing salaries and wages, and
2 |" i4 h5 r) Q1 ~0 |7 ?sound consumer confidence contributed to the overall strength of the
[5 {" g9 j* T, o! W$ Uresidential real estate sector.
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Of the housing types surveyed, the highest average price appreciation
* a9 u, K9 i- s! i q! Z( ~6 Boccurred in detached bungalows, which rose to $300,365 (+16.3%)0 I8 u, n0 Z8 l; I9 E
year-over-year, followed by standard condominiums, which rose to $211,562. U# u* Y7 Q# ~3 b3 W' w3 K
(+14.2%), and standard two-storey properties, which increased to $365,380
0 n( l2 o" q. i+ s(+13.2%).
r! K4 F6 n& f3 d" u& |, R, ?8 x8 S5 S
"Canada's sturdy housing market continued to demonstrate steady growth* ?* E5 L5 w( z5 f B5 h
during the third quarter. For all but the west, we have moved on from the6 R, S, h U: \
frenzied expansion that characterized the first half of this decade, and are
0 [! O+ i& c- s5 ~4 epoised to show continued growth at a more moderate pace," said Phil Soper, H v0 `; i- A0 ?) s/ l2 X
president and chief executive officer, Royal LePage Real Estate Services.
( L7 p1 e; i3 P. ^ k; {"Gone is the sellers' market that we have lived with for some years. We
& F8 o0 M% L# x- ~( s& Cwelcome the more reliable conditions that are characteristic of a healthy9 ]- b6 R/ U, i: R# f. P9 u
balanced market."! I) {9 U" w$ |% N7 E6 h) N/ n
4 }* P [2 P. M4 J7 `6 z( ?2 ` Despite the double-digit rise in average national house prices,- `) \9 Z. y0 L* \3 }- O3 N
considerable regional variances were exhibited again this quarter. The shift
8 O5 |% `5 @' r) R# u& Sto balanced market conditions, which began in late 2005, has continued
' `, ~3 w! K4 ithroughout most of the Central and Eastern regions of the country. In the core
& p' |: }7 H2 e; J( C* q4 uenergy producing western provinces, the combination of very high in-migration,
2 ]; a/ W* D9 N4 l. U @manageable affordability, and a shortage of inventory has driven record U4 `; ]$ j2 U& L$ R/ H& e
breaking price appreciations.6 M* O0 m/ l2 W1 {- r# [
5 Z# d6 _; F- a5 l- X6 d
Echoing the second quarter and supported by Alberta's rapidly expanding7 Q N- B! v% I+ x% N
economy, Calgary and Edmonton led the charge of Canadian cities with the
) j- t" P" l* J+ k* t& \$ a, |largest house price appreciation in all housing types surveyed.
! q1 P1 G$ J' V1 y# K# {
* V0 [6 A% b* l+ q: D+ e. R9 g In Ottawa and Toronto, growth remained steady, supported by solid
$ M: P1 J# l4 H5 E6 feconomic fundamentals, an increase in available inventory and strong consumer. R. ^& {! q5 Y+ {
confidence. While the pace of price appreciation in Ontario leveled off
6 l, D S/ W& h) C" v3 s2 ]) N; K# nslightly, the province's real estate market remains poised for modest growth.
: J' ~1 q+ r, }, f. SIn Atlantic Canada, new housing and condominium construction offered buyers
" m7 e* Z8 O* k rgreater selection at more competitive prices, resulting in a slower rate of& t- r* n' @1 M5 n9 G
price appreciation when compared with 2005.8 c& f7 |& b, L. B, s% c6 z% H
% @% [1 ?* O: c# b" o p+ c
While the pace of growth in Canada has slowed, the domestic housing6 X- U' T# ?( y2 U& i
market is expected to outperform the American market. The economic and! k/ i# Q/ z, j+ ^1 i/ g
financial fundamentals driving the residential real estate sector in Canada
2 v% d8 p+ a/ H+ S1 [" t; C* C, fare markedly different than those found in the United States., h& d6 U& U$ w! I- U
1 ]( t$ n7 C9 g! s Added Soper: "Canada's housing market is likely to outperform the' }9 } V# B% Q5 S( |
American market through 2007. A number of factors are working in Canada's
, d6 G4 U5 n/ C# A; rfavour, including healthy personal and governmental debt levels, the8 a' _0 c) o; t# f3 z+ Y
relatively modest rise in interest rates in our country, and general
; c" `. e$ G# _affordability in our major cities. In addition, Americans are now seeing the* c( o! M% w! `
downside of a tax system that encourages maximum homeowner leverage, and) _" m1 O2 j" d7 r; q5 i
aggressive financial products such as zero- and negative-amortization0 F8 m; ~3 A4 R" A @, [, S. [7 ^2 j
mortgages that work only in a high price growth environment."
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<<$ R- ^5 ]& [# k) h
REGIONAL SUMMARIES
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) m. X$ O4 {* _/ e
/ y# e5 l" q8 ~! X" y) J- z Balanced conditions continued to characterize the housing market in6 T& b/ e- A- |) [5 a
Halifax, as significantly higher inventory levels helped to moderate the rate4 r9 W$ q2 @8 ^* B% Y
of price appreciation. Buyers were increasingly choosy, taking more time
8 N. R0 y4 z! r0 _looking for newer, low-maintenance properties that were not in need of+ t- o" j8 k; y0 P1 S1 l# m- b! H
renovations.2 S2 r$ {% y7 S# Z# i9 m S
6 | b9 p- w6 ^ The housing market in Moncton remained healthy and strong as a slight
4 r' G6 c7 H) ]+ Eincrease in inventory helped to moderate the rate of price appreciation% D6 g4 o$ `; E
compared to the same period in 2005. Activity was brisk throughout August and8 y" \& e# T7 w# }
September and is expected to remain this way through the fourth quarter.
O4 B* U5 D& U& [9 _$ [) Z& v
8 y' i$ n4 z( R& p The housing market in Saint John underwent its traditional summer
- Y# O* ^1 f5 Tslowdown in the third quarter, with activity picking up towards the end of the9 {& o2 s! y- A) y
quarter. The local economy continued to thrive, as construction on a new
/ }" p) k2 O' Y* y4 c( w3 Y600,000 square-foot shopping area has begun, bringing several new box stores
; f% N8 v: e: [# H( I: ]: [5 rto the area. Buyers have begun seeking less expensive fixtures for their homes
8 {& ^" O* h T* G, Dand are instead opting for more affordable housing options.
4 b! x& {. J r+ _) N, m1 f8 Z$ s8 Q y1 B
In Charlottetown, the housing market started to move towards balanced
* f% B7 m6 o: p: {) rconditions, as some sellers had to begin to lower the asking prices on their( Q4 B; ^* \% {4 V7 i8 P' [9 f; |
homes to make them more competitive. Activity from out-of-town and US buyers
3 q3 m; {: P: q2 {( n/ nwas down slightly compared to 2005, likely attributable to the strong Canadian) j7 ]+ |" ^, t4 z [% ?8 |
dollar. Inventory levels began to creep up in the third quarter, providing
. x/ H5 _5 u; m5 U `- Wbuyers with more options when looking for a home.
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Activity in St. John's slowed slightly in the third quarter, particularly
6 ]! l8 j" a$ Bamong higher-priced properties, where there was a slight over-supply of homes
2 D u9 ~( G* f$ gpriced over $200,000. Listing periods have increased when compared with 2005,3 B6 j7 L7 _8 W' E
as some of the pent-up demand that had characterized the market over the last
$ q4 z9 D/ B+ J- b4 c( qfew years has been satisfied, resulting in more normal, balanced conditions.7 h" V5 q* I) b/ ^5 `+ c
* P0 P( ^' v- S$ @8 ^ Montreal's housing market recorded modest increases in average house
; w# p5 Z4 ]3 z) ^% wprices, due to a slight seasonal slowdown in the third quarter as inventory
7 v0 E" W$ D7 c N! Plevels rose. Part of this can be attributed to the fact that many renting; m7 x, W* k0 P. J# B- p* b. }
first-time buyers were motivated to close on the purchase of a home by July 1,. `8 e. V. D& x4 K) x W
when rental leases expire in Quebec. Once this date has passed some of the
! `+ d; e3 D" N! tpressure is taken off the market, allowing buyers to visit more homes before
7 i6 v7 ~2 ?0 k/ N- wmaking a purchase.
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- B [0 `$ Y& M Ottawa held its position as one of the country's most stable housing p" D2 @8 U/ o$ S# ?
markets in the third quarter, reinforced by a vibrant local economy and strong
, o2 P1 B/ l! }6 `5 Iconfidence, resulting in modest increases in average house prices. The city. U! O# W( N' J* I3 v
centre remained a bright spot in Ottawa, with homes in this area attracting' n2 D9 Z# h- W7 Y0 A8 q
attention due to their convenient location and proximity to downtown
/ E( k' r" y: q. {4 A; y5 j% G9 b6 samenities.
: g9 _ E" n' ]0 s7 A. @ ?, _$ A4 n7 U5 U3 C, w
The housing market in Toronto sustained healthy activity levels* Q- W; ^! s7 d
throughout the third quarter, as a strong economy helped to maintain demand* l" N2 \+ n+ \; I
across the city, causing average house prices to rise moderately. Toronto has6 Z- m# q! \) L! t0 C
continued to experience modest growth in average house prices, and has been6 ]+ h# ?/ e+ g# Y& e! Z
driven primarily by purchasers who are buying homes as their principle% X! q( S& h5 ?& K+ W6 b+ T3 U' }
residence, rather than for investment.4 M( Z" S- C; c( T f
5 l J$ `+ T4 i7 N. x The vibrant Winnipeg housing market continued to show its strength as; D- p! z0 s1 s% n2 ~1 K
house prices rose during the third quarter. The booming local economy resulted
- }) t7 u0 W: f# p( |6 w* e- |in a historically low unemployment rate, helping to bolster consumer+ c6 s' p7 _8 @0 N1 M I
confidence and Winnipeg's ranking as the city with the lowest capitalization
% z. L2 b+ S5 i8 t: Q% Q, L+ Grate among the country's larger cities - helped to encourage buyers to enter
P( _5 z a; h* fthe market.$ K$ ?+ e) [3 y& Z: D5 r3 k
: n0 ~2 {9 _% B1 D In Regina, the market experienced a slight seasonal slowdown through9 N9 W2 ^" }8 D- N. _- r7 [
July, as there were fewer purchasers in the market due to summer vacations. In8 a$ w( ^ `6 I0 m
August, activity resumed to the busy pace previously seen in the spring3 G9 c E8 O I0 u
months, as the influx of purchasers made it more difficult to find a home due
, }2 |8 u) V8 lto the shortage of available inventory.; ~& r7 A5 R! k; a, ?3 i! A
& Z9 k, m8 c. @' { Activity in Saskatoon remained brisk as the market maintained its
- [! x# c0 j5 s# R+ y& nmomentum from the busy spring sales period. The economy in Saskatoon remains
. a6 T2 s7 j" {9 h- \" ^2 Dvibrant, as employment opportunities are abundant with many businesses
$ Z& _, ^1 V; Mstruggling to make hires and having to recruit outside the province.
p5 [: S( K% }6 B; ~! m2 O+ E+ d) C" _/ T: T
Calgary's housing market recorded blazing average house price increases4 d+ M7 V2 y# F8 {, D( O5 ]9 V' v
in the third quarter, in all surveyed categories. The burgeoning economy, low( o p, i0 o }. t1 G5 t( O
unemployment rates and low inventory levels remained the leading factors that
( @. u; y1 a' x6 L2 v6 W" apressured Calgary's house prices upwards. However, regardless of the soaring8 U. Z6 v: l! c* P" ^$ D8 ?
prices that characterized the market - even during the typically slower summer
) F* ]/ N. }) a1 w9 D; _season - it is expected that activity will become slightly more balanced, as2 S/ a ]6 d9 N) q/ N6 r* ^
buyers are becoming more reluctant to participate in the frenetic activity.
: i, H) p& j J# g
% M; V6 W( e4 K0 m$ s Edmonton's booming local economy continued to thrive in the third quarter
) f( J& A/ k6 {1 l3 ~. b' Kas activity in the oil sands north of the city continued to flourish. Edmonton0 W! x! W( Y; m6 z5 T# ` L) A2 h
remained the hub of activity for those coming to work in the oil industry,
, W; Q) k; s. z9 y% W: Qmaintaining tight inventory levels across the city, resulting in prices! ]: X6 L2 H( x. e! U& n8 ~
increasing at record levels. However, as inventory levels continued to improve
* m9 t6 S* k1 l3 C' J, ain the third quarter the rate of price appreciation should moderate slightly4 }1 U& w; S* }. j! G
towards the end of 2006. 4 F k. [+ H8 \% {' r4 `
( d8 y* `! E6 H4 cWhile Vancouver has seen a slight reprieve from the severe shortage of9 K( \- S" E" w9 Q5 Q- B4 G
inventory that had previously characterized the market, supply is still unable- e4 r* t# S5 Y6 o4 B& Y8 U% h8 p: F: F
to meet demand, driving house prices upwards. Vancouver has a very diverse
# t" D+ W {$ ~& Q o5 K5 @group of active buyers - from first-time home buyers to baby-boomers to
$ Y+ K# f* I. x0 y* V$ b, }foreign investors - all of whom fuel the demand for houses, placing added& K/ N7 F+ c& I, f; h, E T
pressure on tight inventory levels., J" G) r7 z; J! _% X! ?
7 J* ]# ]6 a1 V Victoria's market is vibrant and supported by strong economic
" [4 O8 N9 B% hfundamentals, fuelled by a booming tech sector and a migration of young people* h# }3 K3 ?! A9 h
into the city that has continued to support the area's house price increases;
% ~* o& v- }; r' \while increased inventory levels have afforded buyers more time when searching6 q' R& n8 A; D6 u7 P6 y! K
for a home, helping to normalize the market's pace.( d k" V: N0 |
& [/ T6 ?% w) D0 G) Q% D << o8 F7 |( W" h: ]' w
Survey of Canadian Average House Prices in the Third Quarter 2006
q! i* a1 n; b1 B8 N
0 k/ b* e) w; S" N3 I$ I -------------------------------------------------------------------------% l. x2 {6 t' x
Detached Bungalows Standard Two Storey
P7 t# M; h& C2 h -------------------------------------------------------------------------6 ]3 f( [ e3 U: [+ N9 N
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q30 o0 ~" i# b$ ?" v$ _, C
Market Average Average % Change Average Average) o: |5 e. r- H" d6 o$ _. t( _( t
-------------------------------------------------------------------------
' B: y5 h2 j' K$ s4 g' q( j Halifax 186,333 173,333 7.5% 198,667 199,0008 }" T% D' l% P; X+ H4 l
-------------------------------------------------------------------------
0 l" h/ W1 [" h$ ^: B Charlottetown 145,000 141,000 2.8% 175,000 170,000: B+ k% h L% V- Z, Q5 x
-------------------------------------------------------------------------0 q) U0 e$ f" g1 M
Moncton 135,000 127,000 6.3% 129,000 123,000( L8 ^& q/ ?: T; X! X6 Y; n& I* Z
-------------------------------------------------------------------------
8 J6 ?8 q4 U# B5 K/ y/ j3 t# C Saint John 141,200 142,900 -1.2% - -( w- w! K/ Y8 O$ l: p
-------------------------------------------------------------------------$ o) r' ?8 ^" S: ?5 B
St. John's 143,667 142,667 0.7% 200,667 202,333
6 v. j& X- y. _5 f6 Y -------------------------------------------------------------------------3 c5 R* [( I9 \7 z
Atlantic 150,240 145,380 3.3% 175,833 173,5832 j5 p; R2 v3 F) ~7 X, v& \1 Y
-------------------------------------------------------------------------1 T4 y+ v" g' \6 a. u, Z; }
Montreal 213,691 203,500 5.0% 321,141 316,1856 i' `# _* H* ~/ s/ T, w7 e: Y
-------------------------------------------------------------------------
; `4 z- Z3 {* a f* N' ~ Ottawa 290,083 278,417 4.2% 285,667 273,250& s' L) j) E9 c( z
-------------------------------------------------------------------------
: f1 M! j [ \) j Toronto 373,368 355,882 4.9% 481,523 474,766
9 Z- ?1 Q3 s! [0 r4 X( _' h -------------------------------------------------------------------------
1 S2 L5 t' B9 {: W, o4 n, Q Winnipeg 181,579 159,860 13.6% 202,337 180,707
7 Z1 t- Y& p( O' g2 q( [ g( [ -------------------------------------------------------------------------
$ g7 K1 r/ Q$ P; Y* m9 T! b6 V* S Saskatchewan 170,667 156,083 9.3% 182,600 166,500
; M; B, j i3 A0 n9 {+ a5 c -------------------------------------------------------------------------
* ]0 a$ E" @* y/ u4 F7 |6 A Calgary 395,067 252,411 56.5% 405,778 264,389# q2 }* H8 F% L6 Y- j& P# n
-------------------------------------------------------------------------
# X% I, y2 @, }' z$ l Edmonton 286,857 194,857 47.2% 316,429 206,714
# O% P' K0 @) N! q; { -------------------------------------------------------------------------
+ P9 I" _% W7 y1 r& R0 |5 [0 H( P3 U Vancouver 704,250 601,000 17.2% 794,000 697,5001 i1 X, R. O( ^; g' j0 V1 x) e) n
-------------------------------------------------------------------------
+ o& m9 Q2 O+ a9 z8 ~4 y Victoria 375,000 348,000 7.8% 403,000 391,000 W0 M9 w H: ?. m: i0 s) p
-------------------------------------------------------------------------
3 P6 q8 g, z; G& h2 h& h7 u7 I National 300,365 258,202 16.3% 365,380 322,860
# `" [ I( R( r$ k6 p' V -------------------------------------------------------------------------$ _; C! S8 S- v! b
+ z5 C! K( j& }5 x2 z: @- e -------------------------------------------------------------
& Z1 {3 V' f. Q& F Standard Condominium
: o( L2 @( N* h1 ]/ e3 z9 N7 @, c -------------------------------------------------------------
6 P* ~$ m2 N; k! b e* A3 n9 ` 2-Storey 2006 Q3 2005 Q3 Condo: I* [. Y. N7 X
Market % Change Average Average % Change
! @5 ]+ r0 w/ [3 ?4 C, F$ F -------------------------------------------------------------4 Z9 }! E7 Y4 K$ J
Halifax -0.2% 142,000 103,000 37.9%
% R7 Q/ \; a9 \: ~% d: O6 c% y# x -------------------------------------------------------------, P8 z' `9 N) ]7 T. g- [. j9 |
Charlottetown 2.9% 98,000 98,000 0.0%- Z' W( j1 {! h, A. h
-------------------------------------------------------------
) I) B: P2 A% t Moncton 4.9% - - N/A% z) P5 c9 o( t- i, e. T% t
-------------------------------------------------------------7 Y# W: [* N: ?5 _
Saint John N/A - - N/A3 g; j$ t) J3 ^' N W/ t: f
-------------------------------------------------------------
6 X5 l K- C/ `+ e0 U* L St. John's -0.8% 146,333 145,667 0.5%- z: B u1 Z# e% f$ B; `
-------------------------------------------------------------$ l! ^7 c3 |4 S0 y$ M! R( K9 F7 j! E$ n3 b
Atlantic 1.3% 128,778 115,556 11.4%) }9 l: F( S, f D7 c$ }
-------------------------------------------------------------8 ]5 _/ y4 e3 z% x
Montreal 1.6% 193,190 188,016 2.8%
2 I. b7 A n x( N8 v! f5 X. r* Y -------------------------------------------------------------, r- a+ ~- O' E2 |/ y
Ottawa 4.5% 181,083 172,250 5.1%
+ y' Q! n) f& f -------------------------------------------------------------
3 ^3 E4 t0 [3 Q2 a9 i. t Toronto 1.4% 252,088 242,918 3.8%
) {1 g( e( X7 u -------------------------------------------------------------
- E' H, L" i% K1 O. P# L# Z Winnipeg 12.0% 105,648 96,008 10.0%
! i) Z5 @, y( `" @ y -------------------------------------------------------------
" T! k" ^8 j7 {* b5 T) g P Saskatchewan 9.7% 106,250 101,000 5.2%$ ^1 o2 r9 y9 h% Y9 o% q
-------------------------------------------------------------
0 U4 q3 [$ F+ N Calgary 53.5% 245,844 153,867 59.8%
0 \+ |$ D) Z, ]8 _ -------------------------------------------------------------
$ k# M/ m8 T) R0 E3 ] Edmonton 53.1% 200,433 131,500 52.4%1 L4 T6 g1 y- ?+ @" T
-------------------------------------------------------------
( X' C0 ^' v5 F4 e0 q+ W" } Vancouver 13.8% 366,250 323,250 13.3%
! B# I% y# t) {# O+ P o -------------------------------------------------------------
- c7 O. H. K4 s, k- I( N& U! J0 \ Victoria 3.1% 229,000 220,000 4.1%/ X9 J" _8 V8 @1 a* M
-------------------------------------------------------------: }6 ~3 N! @3 |% }
National 13.2% 211,562 185,296 14.2%( ^ Z' [% U# D, Q: C. }8 V5 K) _ D
-------------------------------------------------------------
5 u1 |" i# c6 K2 C- d >>
. Y! T: J* ?4 V; h+ @* Z4 H( Z
+ p8 j7 ~7 K" G( ?% t) A" ~0 F Average house prices are based on an average of all sub-markets examined, u/ ~7 c3 W; O
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
9 F' {0 _$ U0 w2 b- G+ hJohn and Victoria.
) y$ c, e: F3 y2 l0 [1 V6 N9 ]) [' k' @6 ]
The Royal LePage Survey of Canadian House Prices is the largest, most( l$ }; u( U8 S, u3 R; T
comprehensive study of its kind in Canada, with information on seven types of4 v, \3 @" J* ~% G: `" k
housing in over 250 neighbourhoods from coast to coast. This release
0 S q* i8 L0 n( E9 Z% ureferences an abbreviated version of the survey, which highlights house price
% i9 A/ U8 w7 R" s" e0 ztrends for the three most common types of housing in Canada in 80 communities
2 K# R3 s! A& |' Iacross the country. A complete database of past and present surveys is
7 j5 e8 o/ W/ Y( Q& c8 Mavailable on the Royal LePage Web site at www.royallepage.ca, and current
, y4 M0 w1 w* i, V! ~0 rfigures will be updated following the end of the third quarter. A printable
1 S0 M3 ^) E! h7 m0 dversion of the third quarter 2006 survey will be available online on# ~3 x. [5 e3 o
November 15, 2006.
0 m( S0 i H x: P: Q+ T Housing values in the Royal LePage Survey are Royal LePage opinions of: j4 f. N" g, ?0 J. h1 R. w
fair market value in each location, based on local data and market knowledge0 n9 S4 X4 `* O0 ^, H: b
provided by Royal LePage residential real estate experts. Historical data is E- i: n6 h' |! ^( s3 S9 y) ^
available for some areas back to the early 1970s. |
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