Rising home prices in the third quarter likely disguised a slowing market for real estate agents and mortgage brokers, alike, suggests a new survey from Royal LePage.
“The strength in Canada’s national housing market conceals signs of predictable softening in some regions,” said Phil Soper, president and CEO of Royal LePage Real Estate Services, in a press release introducing the report. “The third quarter saw a return to a normal seasonal business cycle as price appreciation slowed in many areas – with some average values even falling slightly – after the busy spring trading season. A broader slowdown is expected in the months ahead but fears of a US-style correction are completely unfounded.”
Looking back at the third quarter, the Royal LePage House Price Survey points to an increase of between 5.7 per cent and 7.8 per cent in the average home price, compared to the same period last year.
That growth largely defied analysts’ expectations, driven by low interest rates and broad consumer confidence. Still, it doesn’t disguise the fact that the actual number of home purchases in key markets continued to slip, month-over-month.
Alberta was in many ways the exception. The volume of homes trading hands increased, although house prices for detached bungalows in Calgary, for example, fell 1.0 per cent in the third quarter.
Sustained demand from foreign buyers helped drive prices up in the country’s largest markets as Vancouver’s standard two-storey homes rose 16.9 per cent year-over-year to $1,142,500. Toronto’s shot up 9.4 per cent to $518,433.
Those higher prices may bump up commission cheques for brokers, but do little to raise revenue tied down by a flat number of new purchases.
Still, many are now actively expanding their territory in an effort to compensate for that slower, if pricier market.
“I’m hoping to get licensed in Alberta this month, during the licensing period there,” Scott Dawson, a broker with Verico Paragon Pacific Mortgages in Burnaby, told MortgageBrokerNews.ca. “I’m busy this year and have exceeded last year’s funded volume, but there are sections of the market here that have slowed. Given the average home price and the economy, in terms of the potential for originations, Alberta is very attractive.”