Limited supply pushing prices up

Limited supply pushing prices up

Limited supply pushing prices up

Home buyers will have to prepare to shell-out or be left out as the limited supply of single-family puts further pressure on the market.

Increased competition and bidding wars for limited supply of single-family homes in major cities is driving national price figures, according to Royal LePage.

The real estate company says the average price of a home in Canada increased between 3.9 per cent and 5.2 per cent in the second quarter of 2014 and prices are expected to go up steadily for the rest of the year.

The average price of detached bungalows rose 5.2 per cent to an average price of $406,454. Standard two-storey homes rose 5.1 per cent year-over-year to $440,972, while standard condominiums posted gains of 3.9 per cent to $258,501.

"Chronic supply shortages are driving price spikes in Canada's major cities, masking otherwise moderate home price appreciation nationally," said Phil Soper, president and chief executive of Royal LePage. "While a widening affordability gap in Canada's largest urban centres is characterizing the national market Canadians read about daily, year-over-year house price increases in most regions of the country are presently tracking below the historical average.”

Smaller cities, such as London, recorded more moderate house price gains, with the Ont. region enjoying a 2.2 per cent increase for detached bungalows.

Looking ahead, Royal LePage is projecting that the national average house price will increase at 5.1 per cent for the full-year.