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Canada's housing market both vigorous and stable
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- Country's market poised to show growth throughout 2006 -
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TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market7 Z3 e& d& e4 w; @, Y
exhibited moderate price increases and stable unit sales during the third
6 t! l! c& k, `8 @' c3 e* @# Hquarter. Wide regional variances continued to be the dominant characteristic
( R2 ^* P7 f# ?3 yin the market, exemplified by frenzied levels of activity and double digit
8 x; f0 Q9 ~/ V; s3 p: h: Qprice gains observed in the energy and commodity rich Western provinces, and0 h$ g- \+ ^* m
more reasonable sales volumes and moderate price appreciation in Ontario,( `2 o- l) X! ^; U
Quebec and Atlantic Canada, according to a report released today by Royal
8 ~2 G& m" Y0 G% c( _. ^1 CLePage Real Estate Services.; ~8 N9 v0 t {7 ?
0 Z0 `. N/ t9 n9 m9 ^- C: `
Nationally, market trends established through the first three quarters
/ o2 @, F5 U) x: ^* Z1 E$ iare forecast to continue for the remainder of the year. Robust economic
# X- J' a& w* l: M0 z! o3 ]conditions, low unemployment rates, modestly growing salaries and wages, and% k1 `& O8 L) \5 c2 j$ q
sound consumer confidence contributed to the overall strength of the
7 e: Z& ~! v7 O8 z: tresidential real estate sector.
8 Y# i( B9 ?% R% Q4 e( K$ J
5 g5 r1 a, c( K# W5 x ~* }5 Q Of the housing types surveyed, the highest average price appreciation; T* \8 O* A( b3 t9 F: }3 E0 N. c
occurred in detached bungalows, which rose to $300,365 (+16.3%)# D( I; w% b* ^
year-over-year, followed by standard condominiums, which rose to $211,5627 s( t, e+ J3 b; Q) M
(+14.2%), and standard two-storey properties, which increased to $365,380
1 a( {( F" T+ A6 M& P(+13.2%).
* H8 I. E& P5 m7 x4 F" ^7 {+ A9 Q( ?, R! m
"Canada's sturdy housing market continued to demonstrate steady growth6 u& s- l( V$ B2 N+ v. z
during the third quarter. For all but the west, we have moved on from the
( ^9 N3 Q, w$ n5 ]1 \: \frenzied expansion that characterized the first half of this decade, and are/ T4 O* T6 o3 s" ]' L- D
poised to show continued growth at a more moderate pace," said Phil Soper,+ S% \6 q8 [1 y ~2 T
president and chief executive officer, Royal LePage Real Estate Services.
; \$ C, a* A# [1 F/ d/ K"Gone is the sellers' market that we have lived with for some years. We
& R) h' ]* d+ J2 fwelcome the more reliable conditions that are characteristic of a healthy0 K, P& U5 i- y' p$ h
balanced market."
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Despite the double-digit rise in average national house prices,3 B$ z1 U& u# y& T" s/ |5 o, Q
considerable regional variances were exhibited again this quarter. The shift
, Z5 P3 H4 c g: a! r3 a# k$ kto balanced market conditions, which began in late 2005, has continued
; j- R3 g4 U* E; zthroughout most of the Central and Eastern regions of the country. In the core
}$ H9 Y+ E, c4 g! ~7 Nenergy producing western provinces, the combination of very high in-migration,
) r( }6 p( v/ ]" Fmanageable affordability, and a shortage of inventory has driven record) n& q, g( M5 O! s& V% c
breaking price appreciations.
, M$ o9 D& E0 L9 V# z. Z
/ N) o: M8 `; r% F8 L. X9 Q Echoing the second quarter and supported by Alberta's rapidly expanding e2 m6 B& W Z! j) m, ?
economy, Calgary and Edmonton led the charge of Canadian cities with the# p, r; U0 N2 M
largest house price appreciation in all housing types surveyed.% h3 m& q9 A& B9 E/ ~4 |4 T
* Y% J, r6 p8 j+ E4 D# { In Ottawa and Toronto, growth remained steady, supported by solid/ z4 e0 S; f, D
economic fundamentals, an increase in available inventory and strong consumer: F. h1 E# |( ~+ `
confidence. While the pace of price appreciation in Ontario leveled off
& ]2 s$ S4 t! |slightly, the province's real estate market remains poised for modest growth.
9 O; T3 |" I8 ` qIn Atlantic Canada, new housing and condominium construction offered buyers
0 m4 L% t/ M4 o/ ? k9 jgreater selection at more competitive prices, resulting in a slower rate of/ d" o" j: k; ]9 U+ Q$ Z
price appreciation when compared with 2005.
6 R5 w- L. N, P; ]
' \; D7 r3 E6 ?4 O$ q9 R) V( o" K5 O- `' k While the pace of growth in Canada has slowed, the domestic housing
5 M1 T$ |* J( `7 v3 ]) J& d/ xmarket is expected to outperform the American market. The economic and
5 t$ N4 C) O$ x. F5 B' ]0 sfinancial fundamentals driving the residential real estate sector in Canada: K2 `& L s! y+ `( G% g1 R) b# R
are markedly different than those found in the United States.) U. v' n! N1 Z! v Y3 Z
8 q+ y% i' D7 J3 x C
Added Soper: "Canada's housing market is likely to outperform the
% n$ I! Q$ X. G/ G" P5 JAmerican market through 2007. A number of factors are working in Canada's
. u* N4 N8 ~+ X& Qfavour, including healthy personal and governmental debt levels, the
U7 z$ U# [6 @/ R; ~' {relatively modest rise in interest rates in our country, and general
1 t: g# x0 o0 kaffordability in our major cities. In addition, Americans are now seeing the
j4 P0 v) C- m8 U3 h7 s+ G) X0 edownside of a tax system that encourages maximum homeowner leverage, and) B3 c7 t* L% e4 J$ L9 ~
aggressive financial products such as zero- and negative-amortization, w0 V9 B7 V( C1 m; G. Q' a
mortgages that work only in a high price growth environment."
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' j* d: g! E* h3 q0 {, u& U/ F% E REGIONAL SUMMARIES+ X' ^/ B/ s7 K7 U* H9 X0 D9 o- G
>>
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" I( _( C' M% d8 q: }8 V I Balanced conditions continued to characterize the housing market in
! R6 ^7 B6 ?9 RHalifax, as significantly higher inventory levels helped to moderate the rate
! o) O9 M5 _, f" R6 Sof price appreciation. Buyers were increasingly choosy, taking more time+ ?! u8 ^1 h0 Y
looking for newer, low-maintenance properties that were not in need of
: R7 j8 o$ y) u: X+ T4 \3 ^renovations.
7 b1 Z$ ]& |5 ~# Y/ c
; a/ X5 y3 J( h: o1 [ The housing market in Moncton remained healthy and strong as a slight, K0 T2 Y0 o0 a/ w# `. _
increase in inventory helped to moderate the rate of price appreciation
z/ o3 F& D$ b7 F2 h0 D9 [compared to the same period in 2005. Activity was brisk throughout August and
" k# w7 L& T3 e+ H* x8 o( c* ?" CSeptember and is expected to remain this way through the fourth quarter." ~: s, Z9 K- u* t8 Q- r9 ?6 h
4 |+ F& p! j$ ` v, I The housing market in Saint John underwent its traditional summer
, M9 i% q2 M& g3 w* V# @. Hslowdown in the third quarter, with activity picking up towards the end of the7 g; `$ r1 i; @$ Y+ v6 T- u
quarter. The local economy continued to thrive, as construction on a new: o, y2 `7 X1 ?: u
600,000 square-foot shopping area has begun, bringing several new box stores/ f/ s5 Y o4 m( l8 ^8 R
to the area. Buyers have begun seeking less expensive fixtures for their homes# ?( \4 h& t" T2 p* Q1 Y
and are instead opting for more affordable housing options.- [# L" t( q" V. j; o
6 Z- p% {& s" e5 X% ^9 L In Charlottetown, the housing market started to move towards balanced
1 V3 M. p7 @/ X/ j/ k: Dconditions, as some sellers had to begin to lower the asking prices on their' x* |9 R% u3 _. f# b# f M4 u
homes to make them more competitive. Activity from out-of-town and US buyers
8 y x1 i" J; L0 r+ s5 Fwas down slightly compared to 2005, likely attributable to the strong Canadian
7 C" Y0 S2 Q4 D Xdollar. Inventory levels began to creep up in the third quarter, providing, ?3 B: v1 U1 B
buyers with more options when looking for a home.
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& p; `% K, e2 w6 F0 d; j% J2 i4 g Activity in St. John's slowed slightly in the third quarter, particularly
. [; I; D1 w) M$ E# [among higher-priced properties, where there was a slight over-supply of homes4 B) Z" _! T7 x" b7 `7 D7 o
priced over $200,000. Listing periods have increased when compared with 2005,3 D" O1 W% @; p. {1 L
as some of the pent-up demand that had characterized the market over the last
" O* O9 }/ k" Y) _! x8 [" Dfew years has been satisfied, resulting in more normal, balanced conditions.* o5 b- |* ]' _' P! \, a
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Montreal's housing market recorded modest increases in average house
/ K: Q L# G6 u$ Hprices, due to a slight seasonal slowdown in the third quarter as inventory
G0 l& t" j* `3 d; y, xlevels rose. Part of this can be attributed to the fact that many renting0 ^/ [! P% e8 [3 m
first-time buyers were motivated to close on the purchase of a home by July 1,% m/ t; P$ O% ?/ a$ e2 Y! m
when rental leases expire in Quebec. Once this date has passed some of the
4 e, d# d; } Apressure is taken off the market, allowing buyers to visit more homes before0 M2 \1 |6 |) `, l
making a purchase./ v( h+ M7 v5 S" \) Z- O( V+ u
- C& Z; f, ]% o# g2 u+ L Ottawa held its position as one of the country's most stable housing" B- B4 R. r2 s- H: G
markets in the third quarter, reinforced by a vibrant local economy and strong4 H, _$ T" u3 D/ o2 |- B
confidence, resulting in modest increases in average house prices. The city
; T" e$ j4 l9 G- S+ \centre remained a bright spot in Ottawa, with homes in this area attracting; ?/ C" ] t( o6 V" Y# P4 q. N
attention due to their convenient location and proximity to downtown; R, m1 u. F, \2 G* F! \6 U/ ~4 q
amenities.
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The housing market in Toronto sustained healthy activity levels
8 |9 y/ j3 B& l1 b/ Ithroughout the third quarter, as a strong economy helped to maintain demand% u1 t5 Z ?( a9 ~( E8 z7 ]) q
across the city, causing average house prices to rise moderately. Toronto has5 s& \! A# `: W, F- s* N5 g
continued to experience modest growth in average house prices, and has been
3 H* K# }9 J. }+ edriven primarily by purchasers who are buying homes as their principle* o% ~. V% S! o! S( o3 H' E; K6 [
residence, rather than for investment.
~* |# a5 n! d) ], F3 G1 d) C: G+ q+ B- L" [3 n7 w7 }
The vibrant Winnipeg housing market continued to show its strength as
0 |' {1 [- X" X+ Thouse prices rose during the third quarter. The booming local economy resulted' N" n: f8 [' @6 ~1 e; a8 q7 j
in a historically low unemployment rate, helping to bolster consumer
% z9 Q3 r3 i N w7 Wconfidence and Winnipeg's ranking as the city with the lowest capitalization5 G& R( O! P* m& ~% I% u9 B
rate among the country's larger cities - helped to encourage buyers to enter' ?+ e0 n! v+ I* J) t
the market.3 E. W% _$ {5 C: i; E% u" L! w
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In Regina, the market experienced a slight seasonal slowdown through: W. P; s7 p9 d! x, E2 R' l; p! E
July, as there were fewer purchasers in the market due to summer vacations. In
# Y, \; I1 l; jAugust, activity resumed to the busy pace previously seen in the spring U$ [2 s9 H$ g
months, as the influx of purchasers made it more difficult to find a home due
" z; r! K5 Q& A, l$ @/ }: Wto the shortage of available inventory.
$ ?+ U \+ k3 x, q3 m$ q( D
, F8 B7 `5 \/ E! S5 o Activity in Saskatoon remained brisk as the market maintained its
$ d# h- g W: a* `7 N, ]8 `! I! z8 nmomentum from the busy spring sales period. The economy in Saskatoon remains: ]2 g v$ I2 \6 ]/ j/ p* }; p
vibrant, as employment opportunities are abundant with many businesses
* l1 [/ M9 U& u& r$ q7 T' N; [struggling to make hires and having to recruit outside the province.
$ j, j) M9 L1 f+ Q
. }4 g! l# C% L: K Calgary's housing market recorded blazing average house price increases z, V% \; o6 ~% V/ m( D* {
in the third quarter, in all surveyed categories. The burgeoning economy, low: x8 P% n$ j+ d: v& c4 i$ U
unemployment rates and low inventory levels remained the leading factors that3 U9 A4 Y0 q6 q4 i% D( _/ @
pressured Calgary's house prices upwards. However, regardless of the soaring! `% M6 H2 p4 L+ i3 Z6 ~4 \0 I
prices that characterized the market - even during the typically slower summer3 }8 m" m+ _9 N, {; U
season - it is expected that activity will become slightly more balanced, as# r E0 s5 u- K$ O& o. [7 m
buyers are becoming more reluctant to participate in the frenetic activity.* b# S7 V: W3 k# b
- ~5 c) P* T5 Q) B7 D, n* G
Edmonton's booming local economy continued to thrive in the third quarter
5 b% D$ E; l" N3 q5 r+ }3 Eas activity in the oil sands north of the city continued to flourish. Edmonton3 s6 z, n0 L" d( G1 S4 O1 G# H/ t
remained the hub of activity for those coming to work in the oil industry," Z3 n' ?2 X( q' v0 @8 [8 q8 g
maintaining tight inventory levels across the city, resulting in prices2 |9 G; }* D$ [
increasing at record levels. However, as inventory levels continued to improve
5 U! I0 y1 U" U: sin the third quarter the rate of price appreciation should moderate slightly/ Y8 C9 [+ ]) Z) y i9 _3 \
towards the end of 2006.
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6 @2 p' t# B3 l1 U) x2 H3 X- eWhile Vancouver has seen a slight reprieve from the severe shortage of
: L0 \7 c9 w' y% u x2 Kinventory that had previously characterized the market, supply is still unable2 M0 X9 b" A; M! V4 O
to meet demand, driving house prices upwards. Vancouver has a very diverse
+ r( k( P: W; D, Xgroup of active buyers - from first-time home buyers to baby-boomers to4 P+ N7 q) o' C' E H1 ^& a
foreign investors - all of whom fuel the demand for houses, placing added+ ?8 r& x8 N/ ~
pressure on tight inventory levels.
4 k9 o3 v$ ~4 a5 N4 v$ Z4 O( y9 }# [: \: r% v% C
Victoria's market is vibrant and supported by strong economic; z; z1 c& \( U. c7 x
fundamentals, fuelled by a booming tech sector and a migration of young people
1 h; s. q Q4 M1 [, M7 s7 Ninto the city that has continued to support the area's house price increases;" w$ F5 R t$ b0 b, T
while increased inventory levels have afforded buyers more time when searching3 M9 X3 R) u3 ?
for a home, helping to normalize the market's pace.
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1 a- X! C& o$ ]% U+ o5 w <<, H- y1 M# \) E3 w4 K, e& Q
Survey of Canadian Average House Prices in the Third Quarter 2006
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-------------------------------------------------------------------------* |" z; g/ p& M+ c3 m4 V
Detached Bungalows Standard Two Storey
% [5 @ D1 `4 Z -------------------------------------------------------------------------
. ], z% u! N. I) w 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q38 P9 q# [' I, a! I, a, S( [9 n$ [
Market Average Average % Change Average Average
& |$ k6 u6 w3 v -------------------------------------------------------------------------4 F0 ]( U( h+ ~/ f- d
Halifax 186,333 173,333 7.5% 198,667 199,000
5 S+ I. h1 T- O% e7 Q% ~$ z/ p -------------------------------------------------------------------------4 a+ \: b4 G! ?
Charlottetown 145,000 141,000 2.8% 175,000 170,000: r7 F: i5 M k9 Q4 @! R( J1 ?
-------------------------------------------------------------------------
1 k: j6 j0 O5 G2 v5 _ Moncton 135,000 127,000 6.3% 129,000 123,000, b' V {- {3 O3 x4 N
-------------------------------------------------------------------------' N9 |/ M0 O: Z$ C* C4 b
Saint John 141,200 142,900 -1.2% - -
& k3 {4 w! n/ l# s0 @. I1 Z -------------------------------------------------------------------------
7 \1 g$ p0 _$ I$ @2 ~ St. John's 143,667 142,667 0.7% 200,667 202,333
2 e H/ Y2 A& N. X* ] -------------------------------------------------------------------------
/ o' l5 _( b) w. P. b4 z Atlantic 150,240 145,380 3.3% 175,833 173,583" v s' x5 a6 j8 |2 f
-------------------------------------------------------------------------
$ R1 L* C/ K: U" K! P/ m8 z* }& @ Montreal 213,691 203,500 5.0% 321,141 316,185% @2 t2 v4 J4 {" ~( G% f; J0 u
-------------------------------------------------------------------------( {7 q- H( _8 f: H7 i: A
Ottawa 290,083 278,417 4.2% 285,667 273,250& Q$ k) @; u) f# [3 o# H
-------------------------------------------------------------------------4 l# z& I1 j. }* j, Y! V* Q% H! C
Toronto 373,368 355,882 4.9% 481,523 474,7666 l- \& H; y" s3 Z
-------------------------------------------------------------------------5 ~* p- ^5 c5 Q2 |
Winnipeg 181,579 159,860 13.6% 202,337 180,707: s6 H! A# j, z8 Y Z" j# e
-------------------------------------------------------------------------8 H) S3 a" E9 Z" A1 D; |+ |
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
2 r% c1 o4 f- ^( B% c -------------------------------------------------------------------------/ \, ^3 V2 B' u6 u
Calgary 395,067 252,411 56.5% 405,778 264,389
$ G. [% d+ i0 b -------------------------------------------------------------------------8 F" c- t8 U" [/ w0 x( a
Edmonton 286,857 194,857 47.2% 316,429 206,714
c0 h& t9 L4 \; W8 v -------------------------------------------------------------------------
- q J6 l% y4 }+ O7 q" O Vancouver 704,250 601,000 17.2% 794,000 697,500) c! m" Q& G; k9 m
-------------------------------------------------------------------------# G( s" \: x6 }
Victoria 375,000 348,000 7.8% 403,000 391,000# m$ o. O q$ b' U0 [5 G
-------------------------------------------------------------------------
* ~) D& H( c' J- @0 ` National 300,365 258,202 16.3% 365,380 322,860
) U9 \, E, f8 {( ^ a) P1 Y -------------------------------------------------------------------------+ ?7 B% a1 G0 T& B. T' I- D4 m( o' M
& t! L d. y m8 B -------------------------------------------------------------
$ p5 A) G( D4 n$ J0 W8 Q$ K- W- O+ t+ S Standard Condominium
3 C6 B7 Z& I% I4 u7 B6 S% B, T -------------------------------------------------------------
) W+ {5 V! E5 r 2-Storey 2006 Q3 2005 Q3 Condo
1 o5 c2 S7 I+ u1 U6 I4 K% ] Market % Change Average Average % Change; o f1 P) m2 v! a
-------------------------------------------------------------
8 n7 W9 r$ }$ e. `, u, w" U0 Z0 {' L Halifax -0.2% 142,000 103,000 37.9%
5 V- M4 S/ d; ^: N6 C. q* } -------------------------------------------------------------
6 z% H. q" N* M+ W Charlottetown 2.9% 98,000 98,000 0.0%1 h( {0 ~$ _% m- O3 a) m3 t* g3 a
-------------------------------------------------------------
. u3 b" X; m8 b' ?) C8 F Moncton 4.9% - - N/A
0 R7 E7 H3 g f -------------------------------------------------------------6 c) G& z9 @. @) T
Saint John N/A - - N/A
1 Z% o5 J3 q( j0 ^ -------------------------------------------------------------+ n- D2 t9 k3 M, V; z8 C/ K
St. John's -0.8% 146,333 145,667 0.5%
4 W) L* x7 d7 l G9 [9 D) U: }# R -------------------------------------------------------------
, t5 G3 W4 d- \; T Atlantic 1.3% 128,778 115,556 11.4%' M, A2 F m& q( m/ L/ B. p
-------------------------------------------------------------- ~# [! f- W' p* H% l* V2 c
Montreal 1.6% 193,190 188,016 2.8%' A4 I3 C0 D7 Q; P
-------------------------------------------------------------/ @9 t3 ^7 P! n' F1 a/ [7 b
Ottawa 4.5% 181,083 172,250 5.1%9 F/ k. i: k- Z# a
-------------------------------------------------------------* u6 @( B2 k0 i$ O8 i2 M
Toronto 1.4% 252,088 242,918 3.8%$ @7 A' t9 Z8 A
-------------------------------------------------------------
3 \! R) {4 L; a4 ]- f8 F Winnipeg 12.0% 105,648 96,008 10.0%
! |9 s1 Y/ y1 ]1 ]- w/ ~0 j -------------------------------------------------------------
6 c7 V4 q9 p6 x0 _' u/ U Saskatchewan 9.7% 106,250 101,000 5.2%
. Y7 ^ w- ^: B -------------------------------------------------------------
3 n8 L4 \& P4 m' b; e* W# K Calgary 53.5% 245,844 153,867 59.8%
' ~# E: x+ [2 i& P8 a0 j) y -------------------------------------------------------------
. G& N2 r/ c! G8 T4 p4 I1 f Edmonton 53.1% 200,433 131,500 52.4%
& ]0 m5 }! y1 ~1 M# r' p( ^ -------------------------------------------------------------: [" M, l$ b/ K( M7 ]
Vancouver 13.8% 366,250 323,250 13.3%1 E/ p1 ]7 O% c0 ^; g( |# L ^6 r
------------------------------------------------------------- c4 k* Q/ ?5 q- i* {7 J6 ~% T
Victoria 3.1% 229,000 220,000 4.1%
1 `3 F4 {' h9 G! X. z; `0 Q -------------------------------------------------------------
1 o, W5 o! P& G National 13.2% 211,562 185,296 14.2%
+ N' I$ q! k! X ?3 H3 P: u -------------------------------------------------------------
+ [6 n9 e; v& I# S+ Y >>
6 A$ a4 w+ ^6 L# U0 z( o( E% v/ c4 O9 g9 J3 ]) g& f% e
Average house prices are based on an average of all sub-markets examined7 }0 ]; l4 o* I3 Y u. f$ i
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
- K4 |% c5 {5 Z+ m4 t, C5 D' R# N+ ZJohn and Victoria.5 o1 a" S1 f0 a% A4 _' B& p
' D3 V9 k, x& { The Royal LePage Survey of Canadian House Prices is the largest, most
! |, j+ V0 J2 l' W# Qcomprehensive study of its kind in Canada, with information on seven types of9 g) k4 ^. k, j0 ?( z4 \5 v! z
housing in over 250 neighbourhoods from coast to coast. This release
0 \4 o. G1 H7 v4 N7 Ereferences an abbreviated version of the survey, which highlights house price4 m2 s8 A: ?4 o* }+ ?9 h# A' L
trends for the three most common types of housing in Canada in 80 communities
9 i/ c3 ^5 B9 q1 }% L, xacross the country. A complete database of past and present surveys is* d0 S5 ?4 P* x6 ?& ~, r& }4 r
available on the Royal LePage Web site at www.royallepage.ca, and current
, u4 _* q, W/ V( R) d& n* a, V- j* Rfigures will be updated following the end of the third quarter. A printable
* i! ~0 H) ]# N* k0 ^version of the third quarter 2006 survey will be available online on
" Y' S/ u; n7 @, d1 H2 y5 C d" FNovember 15, 2006.; t7 v- S7 g; p
Housing values in the Royal LePage Survey are Royal LePage opinions of# [) c- {( g" V
fair market value in each location, based on local data and market knowledge7 ~) {1 W% }: D4 _& z4 a C
provided by Royal LePage residential real estate experts. Historical data is+ U' a4 B$ {- c) e
available for some areas back to the early 1970s. |
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