Home prices to increase in 2014

A recent prediction from the Canadian Real Estate Association (CREA) points to a slight increase in home prices across the country in the new year.

CREA forecasts that average home prices will jump 2.5 per cent in 2014, with the average sales prices expected to increase to $391,100.

One of the main reasons for this increase is the strong performance observed in many of Canada's largest markets over the spring and summer periods of 2013. This paints a graeat picture for Canada, despite negativity from some experts.

"The bigger picture is how well national sales held up in 2013 amid a torrent of calls for calamity in Canada's housing market and dime-a-dozen doomsday forecasts at the start of 2013," says BMO Capital Markets chief economist Douglas Porter.

In particular, Toronto and Vancouver, the country's two largest markets, were instrumental in raising average prices by 9.8 per cent during this period. But if those two markets were to be subtracted from the equation, the total increase would drop down to 4.3 per cent.

"Looking past some of the wild gyrations of the past year, the broader trends in the Canadian housing market are remarkably calm," Porter added.

Single-family homes were the top performers in November, with prices jumping 4.88 per cent. Second place belonged to two-storey detached homes, which saw a 4.59 per cent increase. Rounding out the pack were row houses and townhouses at 3.13 per cent each, and condos at 2.46 per cent.




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