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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 -( y7 W8 b. c0 z8 N _ t
; H, s7 A, f0 q9 \ w3 A3 x( ?/ t TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
& Q; z( X! }" L3 w; A. D1 k0 c- Mexhibited moderate price increases and stable unit sales during the third# }3 B& Y$ X/ |( L
quarter. Wide regional variances continued to be the dominant characteristic
2 S) D# o* t, H) W5 din the market, exemplified by frenzied levels of activity and double digit
" g ^1 P6 ]. c( H7 `) H; q% w( kprice gains observed in the energy and commodity rich Western provinces, and D; A7 x7 w# H u
more reasonable sales volumes and moderate price appreciation in Ontario,
: i; F! ^: D9 B7 ^$ OQuebec and Atlantic Canada, according to a report released today by Royal; S, Q8 j( v$ U+ H+ |
LePage Real Estate Services.3 }7 G# F( l7 z/ [# c
* A2 i* J1 F) ^3 J Nationally, market trends established through the first three quarters3 ?; U/ O& B6 A9 H
are forecast to continue for the remainder of the year. Robust economic; F: E# \& K; x% D0 D+ K8 S
conditions, low unemployment rates, modestly growing salaries and wages, and
" v& |/ ^. v5 R) V. }6 s( A8 Gsound consumer confidence contributed to the overall strength of the
# S; n7 K: O- {6 D! P7 q' Eresidential real estate sector.. N ~) G' u! f) N
9 M5 r R" e% e- |9 l
Of the housing types surveyed, the highest average price appreciation
6 X" S4 H$ q; s' b2 Xoccurred in detached bungalows, which rose to $300,365 (+16.3%)
" N9 S3 ^' k9 {3 n7 ?year-over-year, followed by standard condominiums, which rose to $211,562, |. j& Z$ `* U
(+14.2%), and standard two-storey properties, which increased to $365,380
5 M) J7 ~5 A1 r v(+13.2%).
/ k5 A) h c" W6 E
( A: |3 y% ?& M3 z' v$ i "Canada's sturdy housing market continued to demonstrate steady growth
) \% x/ l3 \# {" B( Pduring the third quarter. For all but the west, we have moved on from the, m5 [2 D2 y5 Y2 @! @7 ?3 T
frenzied expansion that characterized the first half of this decade, and are
4 f* @( ^4 I y5 k4 u2 _# Ipoised to show continued growth at a more moderate pace," said Phil Soper,
# @4 S8 X$ G0 g. b$ Jpresident and chief executive officer, Royal LePage Real Estate Services.! g9 ^# v" W. m5 n2 r3 T3 \
"Gone is the sellers' market that we have lived with for some years. We9 z6 F' o! X6 ]- j
welcome the more reliable conditions that are characteristic of a healthy
* o$ \% e# w! b- O/ w% u1 `balanced market."
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( h7 A8 S5 q6 w6 C, L Despite the double-digit rise in average national house prices,
: L+ e/ d, M, _) E0 T6 ]: b; ]considerable regional variances were exhibited again this quarter. The shift
/ d/ T$ R+ I& oto balanced market conditions, which began in late 2005, has continued
7 X/ g& n2 s& ~ s6 S% _throughout most of the Central and Eastern regions of the country. In the core
! x5 V2 u3 h( i& m) V' X0 |energy producing western provinces, the combination of very high in-migration,# f w2 @4 _) {& z' A2 R# k
manageable affordability, and a shortage of inventory has driven record6 X& f& e: f8 z7 x2 x3 b: [# b
breaking price appreciations.5 u9 q H. y5 I# U3 I) S) A. ?, ~7 U2 n
& u. L6 a; R5 \
Echoing the second quarter and supported by Alberta's rapidly expanding* E/ }+ Z* J* A/ W
economy, Calgary and Edmonton led the charge of Canadian cities with the# j' x, ]! R0 f5 R
largest house price appreciation in all housing types surveyed.0 V5 \+ P: e* f$ U: Q! j5 X; L) J
/ j" R4 U+ e. r0 `7 n4 b
In Ottawa and Toronto, growth remained steady, supported by solid9 U& x8 B7 \% g# C W/ D
economic fundamentals, an increase in available inventory and strong consumer9 o; F% E( g' {, L- d; x8 l' s& y
confidence. While the pace of price appreciation in Ontario leveled off3 g* U9 _4 ~/ {4 T
slightly, the province's real estate market remains poised for modest growth.
/ B* N/ `2 U* H6 zIn Atlantic Canada, new housing and condominium construction offered buyers
9 Z% O D& K- |: a r" _! l# hgreater selection at more competitive prices, resulting in a slower rate of$ f; C M8 g$ W
price appreciation when compared with 2005.# A6 F. M$ ?# m5 n0 e/ B
% a2 H; `, y1 _1 S, o While the pace of growth in Canada has slowed, the domestic housing
) ]) W) a" B1 l: `3 fmarket is expected to outperform the American market. The economic and& g& I* q8 I! L; K
financial fundamentals driving the residential real estate sector in Canada7 I& o9 S9 S8 }% D$ z, ]9 s" m
are markedly different than those found in the United States./ ?& ]7 |+ F, G/ x
% ~" K- D2 f5 j) r3 p( P
Added Soper: "Canada's housing market is likely to outperform the
- P4 g$ R9 K' ^% X0 `American market through 2007. A number of factors are working in Canada's& [; K9 m- O* v. G( u$ Y
favour, including healthy personal and governmental debt levels, the
. P) |) M" E) `; x& K7 Frelatively modest rise in interest rates in our country, and general
" b. }- E- }" Y! b' caffordability in our major cities. In addition, Americans are now seeing the, l" x- h/ X! n# w; L2 c3 B
downside of a tax system that encourages maximum homeowner leverage, and8 O' @$ L% ~* b: v! o( q4 N9 y/ C
aggressive financial products such as zero- and negative-amortization
! ?! L1 W7 v) W) Dmortgages that work only in a high price growth environment."
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: V$ ^( ^" l# P& d) r: e << ~! J3 T2 S/ h' r
REGIONAL SUMMARIES; k, X8 q' T! R! v, R
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Balanced conditions continued to characterize the housing market in
) c! p3 u ?" ~2 u. U& @: `: m" \0 GHalifax, as significantly higher inventory levels helped to moderate the rate' O6 D+ h- G- ^+ h) n
of price appreciation. Buyers were increasingly choosy, taking more time. e7 I2 ^, c" D+ X" z
looking for newer, low-maintenance properties that were not in need of% m" z4 S4 ]( M$ r0 F/ L# R
renovations.
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, M4 H+ z2 l: v8 E5 l: M# s The housing market in Moncton remained healthy and strong as a slight
4 D4 N- R7 Z; O( R* `3 `% ^$ c! Nincrease in inventory helped to moderate the rate of price appreciation
4 O# g# F. [" ]5 X* r; {1 ncompared to the same period in 2005. Activity was brisk throughout August and
- E' k. O' x/ K Z; R" OSeptember and is expected to remain this way through the fourth quarter.% A' }9 @8 l' f, b* @, e U& x5 {5 Q6 g
( Y2 ?+ g6 g L4 v; r2 W/ y The housing market in Saint John underwent its traditional summer- I7 b! A. `( S9 p
slowdown in the third quarter, with activity picking up towards the end of the2 n+ ]! B8 ]# W' {& [6 G
quarter. The local economy continued to thrive, as construction on a new
* m; D+ u, S" n600,000 square-foot shopping area has begun, bringing several new box stores: j2 [" L( r( o
to the area. Buyers have begun seeking less expensive fixtures for their homes
1 h; \3 Q9 N* ^8 j; ?! U+ gand are instead opting for more affordable housing options.
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In Charlottetown, the housing market started to move towards balanced
3 k7 Q. x5 K; d! Dconditions, as some sellers had to begin to lower the asking prices on their
( p* p+ H! [' V2 b7 }& h7 Dhomes to make them more competitive. Activity from out-of-town and US buyers- | z0 i! e% S2 v. y8 E
was down slightly compared to 2005, likely attributable to the strong Canadian8 P1 [3 U7 j( w. D& w! c+ j$ q$ x- z
dollar. Inventory levels began to creep up in the third quarter, providing
7 S1 h1 h' D; _" j( Dbuyers with more options when looking for a home.* h: q$ p' x0 }# v
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Activity in St. John's slowed slightly in the third quarter, particularly J" @+ p3 B9 J, j8 P/ N4 ~
among higher-priced properties, where there was a slight over-supply of homes
% e" |) g3 n) k9 gpriced over $200,000. Listing periods have increased when compared with 2005,
C8 Y8 h3 R( U6 x% p. L+ Xas some of the pent-up demand that had characterized the market over the last6 N0 R# @- k) |( a0 w
few years has been satisfied, resulting in more normal, balanced conditions.% T, B& ~0 ~' Z8 A% [6 {( A" x
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Montreal's housing market recorded modest increases in average house$ S( t: f1 r1 f/ f) h
prices, due to a slight seasonal slowdown in the third quarter as inventory* X |0 y! o2 Y2 n1 G. @
levels rose. Part of this can be attributed to the fact that many renting
]6 s( a) p' r7 O) tfirst-time buyers were motivated to close on the purchase of a home by July 1,
# Q% Q$ e- w$ c* ^when rental leases expire in Quebec. Once this date has passed some of the
: ~9 S5 ^1 @6 L& O f+ U1 Z. Gpressure is taken off the market, allowing buyers to visit more homes before
" k5 `" C2 q0 d. ]* v5 Jmaking a purchase.- ?8 G; J0 u! p, \
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Ottawa held its position as one of the country's most stable housing0 x0 |% p& G7 z7 m5 q4 x5 k
markets in the third quarter, reinforced by a vibrant local economy and strong" S9 t* _1 |! y* B2 Q0 [) L5 N
confidence, resulting in modest increases in average house prices. The city! y6 s2 |1 G3 N' f, t
centre remained a bright spot in Ottawa, with homes in this area attracting6 ]" n# O3 _& H+ ^% I! g
attention due to their convenient location and proximity to downtown- }+ h. C/ D. \4 k2 r
amenities.6 Q) O. [* O( X4 L6 D3 Q6 O5 ~
9 J6 w0 e7 Z1 O! s The housing market in Toronto sustained healthy activity levels
! v2 X0 E9 E6 @7 Hthroughout the third quarter, as a strong economy helped to maintain demand; n* Q% k( p5 d0 U) l& I S) O% ^
across the city, causing average house prices to rise moderately. Toronto has
6 Z' J% d! n K( ?: M, Ycontinued to experience modest growth in average house prices, and has been! d# L3 K& |7 g5 {, s, u
driven primarily by purchasers who are buying homes as their principle' @/ y- o' t4 L. _$ J
residence, rather than for investment.
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The vibrant Winnipeg housing market continued to show its strength as) _- {' T3 r t. e' Z0 V0 p) t
house prices rose during the third quarter. The booming local economy resulted
2 R0 T5 _5 O* c$ z+ T4 J Yin a historically low unemployment rate, helping to bolster consumer6 _+ j- {8 C( @. y r
confidence and Winnipeg's ranking as the city with the lowest capitalization
+ J; A9 X8 K2 A9 o. F0 j# H' `rate among the country's larger cities - helped to encourage buyers to enter
, A! ~/ V; d+ T" S2 bthe market.6 w) @7 }6 I" d0 g! m. W
, x: S( o, u3 n+ S6 w# ? In Regina, the market experienced a slight seasonal slowdown through9 N: x n' n* H
July, as there were fewer purchasers in the market due to summer vacations. In/ f( Z* A6 R0 {" P$ L5 C
August, activity resumed to the busy pace previously seen in the spring
0 P) _' N# t9 I0 D s) U9 tmonths, as the influx of purchasers made it more difficult to find a home due4 j3 \' I/ h6 L* q4 e6 Z' p
to the shortage of available inventory." Q& _( X1 t6 w4 W6 ]* F
: \! b& I4 p% q Activity in Saskatoon remained brisk as the market maintained its
/ Y/ B0 @1 T" D* ]. wmomentum from the busy spring sales period. The economy in Saskatoon remains- s* z4 T7 W/ C j: T& a4 y+ {; f
vibrant, as employment opportunities are abundant with many businesses
! }! M) O! G0 {9 U: Sstruggling to make hires and having to recruit outside the province.
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Calgary's housing market recorded blazing average house price increases
4 X5 C$ q2 m, |+ T* B. oin the third quarter, in all surveyed categories. The burgeoning economy, low
, R- q1 l1 v1 M$ G. _ I* Munemployment rates and low inventory levels remained the leading factors that
( ?2 s& m1 J" }% N! ^# k: rpressured Calgary's house prices upwards. However, regardless of the soaring
- N% E" i4 w$ @$ J7 b$ P. z$ zprices that characterized the market - even during the typically slower summer4 n) V" s0 K0 F5 I* Y" ?$ j
season - it is expected that activity will become slightly more balanced, as
* f* z D, o, h3 h8 nbuyers are becoming more reluctant to participate in the frenetic activity.3 i' u" r* Q. i a7 Q
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Edmonton's booming local economy continued to thrive in the third quarter: y+ e( n; U. Q8 O8 k
as activity in the oil sands north of the city continued to flourish. Edmonton
5 E) G2 O, ]6 `6 C! z Bremained the hub of activity for those coming to work in the oil industry,0 ~( K. a) h9 M1 l/ h
maintaining tight inventory levels across the city, resulting in prices2 i; ?( v) l& A: J( O* ~0 o9 h# _
increasing at record levels. However, as inventory levels continued to improve0 }3 t$ ~, x6 u) g# I/ f8 i' H+ {
in the third quarter the rate of price appreciation should moderate slightly
1 @0 u( D3 O2 g! xtowards the end of 2006.
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While Vancouver has seen a slight reprieve from the severe shortage of- r8 ]& \5 l% W) R
inventory that had previously characterized the market, supply is still unable2 v6 D5 l$ v* h( o
to meet demand, driving house prices upwards. Vancouver has a very diverse
" i" J2 ]4 g& t) l; F- hgroup of active buyers - from first-time home buyers to baby-boomers to& j, s3 V" s. c) g; O9 b
foreign investors - all of whom fuel the demand for houses, placing added! y1 I2 L% @: g) ?
pressure on tight inventory levels.9 i- L2 x7 B5 {; B( f; L3 `" e
! }! M6 H9 I% A% _ Victoria's market is vibrant and supported by strong economic# n$ b" E2 t3 a+ `- p
fundamentals, fuelled by a booming tech sector and a migration of young people
6 k$ R, n8 k" `) r+ sinto the city that has continued to support the area's house price increases;
8 P& N7 b0 a) K, q3 G U% v$ f& Uwhile increased inventory levels have afforded buyers more time when searching
' D8 P) I" t; c1 T# k' Hfor a home, helping to normalize the market's pace.
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<<# R2 ~% u5 s: J& t5 p. h
Survey of Canadian Average House Prices in the Third Quarter 2006
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' c* Y# O8 r6 J9 _ Detached Bungalows Standard Two Storey. a+ x6 F$ ]8 z! f+ ^7 k
-------------------------------------------------------------------------
: p' A/ S9 a/ n C 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3- |% K. z! D; O5 M$ Z( Z
Market Average Average % Change Average Average0 L9 }1 D% n0 u) B$ {
-------------------------------------------------------------------------: R! |6 s! f4 x& l# H a2 H/ v
Halifax 186,333 173,333 7.5% 198,667 199,000( o8 ?7 }+ W* J( ?9 A/ \2 X
-------------------------------------------------------------------------* l6 M6 ^+ e' S2 M
Charlottetown 145,000 141,000 2.8% 175,000 170,000* _8 h/ `$ k( a
-------------------------------------------------------------------------2 K& d( t/ `% C1 ~% _
Moncton 135,000 127,000 6.3% 129,000 123,0001 s! h$ [( e' W% w5 y
-------------------------------------------------------------------------
Y0 W U, H' i2 R' s Saint John 141,200 142,900 -1.2% - -
/ C# x8 Y4 g: h2 c$ z W -------------------------------------------------------------------------
/ C+ \- t3 S5 O1 b* p- l2 c" P St. John's 143,667 142,667 0.7% 200,667 202,3332 S: c1 ?( q) X8 w7 {
-------------------------------------------------------------------------; T3 [5 [3 k6 A
Atlantic 150,240 145,380 3.3% 175,833 173,583
4 n0 L2 N# P# Y2 O$ F1 w -------------------------------------------------------------------------
4 y3 T' `6 b8 w Montreal 213,691 203,500 5.0% 321,141 316,185/ L- n& [% _3 L- w0 D; R! C3 O
-------------------------------------------------------------------------* T3 ?3 O( B' U" O7 d, [
Ottawa 290,083 278,417 4.2% 285,667 273,2507 E+ H) p/ O! i) \2 c, m
-------------------------------------------------------------------------
, \: t5 U* M) S& }4 O c" d Toronto 373,368 355,882 4.9% 481,523 474,766' u3 F2 C8 ^- b1 Z, g# F
-------------------------------------------------------------------------
2 @/ Q8 q, u+ O: a: {% w5 M Winnipeg 181,579 159,860 13.6% 202,337 180,707
; S% M, M3 L6 T4 l% Y" v8 l -------------------------------------------------------------------------% V+ A" E, t) I g% g" J1 D
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
* i6 a, L3 z/ i5 u+ L" G4 Q -------------------------------------------------------------------------
6 B3 n' U+ E" i. b% y4 n4 V Calgary 395,067 252,411 56.5% 405,778 264,389
4 V9 c: i$ A- k, n$ o -------------------------------------------------------------------------. L" p' d: A, j% }2 m3 U( \2 T
Edmonton 286,857 194,857 47.2% 316,429 206,714
# p c8 L5 f9 x3 M -------------------------------------------------------------------------; K C7 s+ c$ Y
Vancouver 704,250 601,000 17.2% 794,000 697,500
7 y" v' f5 [9 @; T8 ~3 \ -------------------------------------------------------------------------/ L V& q, s& ]5 A* f# R
Victoria 375,000 348,000 7.8% 403,000 391,000
8 }) V, F8 ^7 a8 F -------------------------------------------------------------------------) U3 t9 V+ X; S
National 300,365 258,202 16.3% 365,380 322,860
1 ]% N3 D: n) W- G6 s. U9 v/ t% ` -------------------------------------------------------------------------
+ o% `: k+ i4 j# o" Z$ j" c. V, ]: S* y' _, P
-------------------------------------------------------------5 C8 e7 _3 P/ n: |" n
Standard Condominium) q: R& s% {; y- P8 k# x- V
-------------------------------------------------------------
% e+ _3 t6 Q: @, ^/ Z: n 2-Storey 2006 Q3 2005 Q3 Condo# i) r- K0 z( Z; e
Market % Change Average Average % Change
5 {0 F3 j7 Q: u; e5 X" ?$ Z, i -------------------------------------------------------------
& k+ Z% I+ \. O0 m Halifax -0.2% 142,000 103,000 37.9%7 ?' X; ~9 K8 d; l. b$ D
-------------------------------------------------------------9 t7 W4 }% h" u7 F
Charlottetown 2.9% 98,000 98,000 0.0%: b* L# j& I& }+ d
-------------------------------------------------------------
& O: V9 O+ k6 _) ?1 I M Moncton 4.9% - - N/A, j3 d! I4 C3 T
-------------------------------------------------------------+ j* c2 V5 l5 J) T; C
Saint John N/A - - N/A/ i, @: `7 ~7 _0 p! V6 A+ L# _
-------------------------------------------------------------
" u ~8 i, l$ {$ ]0 L( p St. John's -0.8% 146,333 145,667 0.5%
( I( N6 u" K/ a* R -------------------------------------------------------------9 G8 C7 E+ f5 t- D6 V
Atlantic 1.3% 128,778 115,556 11.4%
/ ]# z/ j Y' F" R7 S -------------------------------------------------------------
% K" B+ _0 _" |. r* N+ F Montreal 1.6% 193,190 188,016 2.8%
# ]$ a8 U7 G0 L4 b3 J! j -------------------------------------------------------------
8 Y# C+ d: y0 H- D Ottawa 4.5% 181,083 172,250 5.1%- e: m( \: O8 D4 h' Y7 a. Q6 i
-------------------------------------------------------------
. f& a# W. A7 z Toronto 1.4% 252,088 242,918 3.8%$ V* l/ _* Z5 @8 Q' x2 U- ^, W* s
-------------------------------------------------------------
& G3 o" H% |3 { Winnipeg 12.0% 105,648 96,008 10.0%4 H; n5 b( r$ V% i9 ^
-------------------------------------------------------------
# U, H& S5 u% X' i) K Saskatchewan 9.7% 106,250 101,000 5.2%8 [! K7 O6 c- ~0 x
-------------------------------------------------------------" M2 ~, G7 J0 X1 U& s7 Y, l
Calgary 53.5% 245,844 153,867 59.8%
. H/ i; C% d/ G. Q" p( m" H3 F' O -------------------------------------------------------------' D( P- F ^1 |- s; `0 ^
Edmonton 53.1% 200,433 131,500 52.4%
0 H( P8 ]# b3 s% m% _ -------------------------------------------------------------2 n r2 i' f: a1 V0 ^9 C
Vancouver 13.8% 366,250 323,250 13.3%! D1 j% |9 w( }- ^0 A( d* g5 I$ h$ V
-------------------------------------------------------------
6 M' F s5 C: O7 d Victoria 3.1% 229,000 220,000 4.1%9 W, e8 b% a$ y1 F( S3 f7 k( e( j
-------------------------------------------------------------
8 p+ x- Y$ H( _+ B( t, K National 13.2% 211,562 185,296 14.2%
3 Z3 D2 v7 I# R# }7 h -------------------------------------------------------------: _! ]# S0 V9 K- [4 i+ k
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# ?1 t( y+ y0 A, u8 v Average house prices are based on an average of all sub-markets examined3 a0 y5 B; S8 h
in the area, except for the smaller markets of Charlottetown, Moncton, Saint' U0 j' g! L$ G# W/ v: }6 L; q
John and Victoria.
& m6 }3 P0 U n0 M3 |1 S% R
* V4 |) S! Q7 q2 ^/ J- B The Royal LePage Survey of Canadian House Prices is the largest, most0 ~, p1 g4 R) i" n6 E$ j' D
comprehensive study of its kind in Canada, with information on seven types of
8 B8 k5 x# J/ Q. M% A+ G {housing in over 250 neighbourhoods from coast to coast. This release% A' f. t9 o4 m' E
references an abbreviated version of the survey, which highlights house price" a, E2 j- B3 F( W
trends for the three most common types of housing in Canada in 80 communities3 g5 J6 n: H. z4 g! p
across the country. A complete database of past and present surveys is6 d+ g: \/ Y. ~ Q5 x
available on the Royal LePage Web site at www.royallepage.ca, and current
% E- L/ d$ |& P4 W8 f* [# dfigures will be updated following the end of the third quarter. A printable( J0 L5 _0 o( V3 }' D; g1 k
version of the third quarter 2006 survey will be available online on D! b) q% \* w9 [& ?
November 15, 2006.# H: J. e% H, E; |; }( e
Housing values in the Royal LePage Survey are Royal LePage opinions of, F/ ?7 k+ ^. g' h4 X
fair market value in each location, based on local data and market knowledge/ r8 f, M9 E' \8 @! g* S' n6 J( u
provided by Royal LePage residential real estate experts. Historical data is1 s( @# Y( H' h1 m
available for some areas back to the early 1970s. |
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