Demand created by population growth and first-time buyers
TRURO - The Royal LePage House Price Survey and Market Survey Forecast released Tuesday showed that Truro and Colchester are in a balanced real estate market.
In the second quarter of 2012, detached bungalows sold for an average price of $171,175 while standard two-storey homes sold on average for $199,000.
"Last year we were in a buyer's market but we have seen demand shift the region into a healthier market," said Todlynn MacPherson, associate broker, Royal LePage Truro Real Estate. "Despite the increase in market activity, the region still has an excellent selection of both detached bungalows and standard two-storey homes."
MacPherson noted that the increase in market activity is due to demand from population growth and first-time buyers who have been attracted to the market by low interest rates.
Nationally, in the second quarter, standard two-storey homes rose 4.7 per cent year-over-year to $408,423, while detached bungalows increased 5.5 per cent to $376,311. Average prices for standard condominiums increased 3.3 per cent to $245,825. During this period, signs from across the country clearly indicated that the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.
"We have had three years of solid house price appreciation in almost all regions of the country," said Phil Soper, president and CEO of Royal LePage Real Estate Services. "Confidence in Canada's real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates."
The first-time buyer segment of the population, which represents up to half or all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.