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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 -
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- J* x# |; |+ |* U TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market J& K2 _- N" p+ [" k
exhibited moderate price increases and stable unit sales during the third
3 Z3 E& P- }; k4 v+ zquarter. Wide regional variances continued to be the dominant characteristic% r' p3 T% Z- l0 G$ X
in the market, exemplified by frenzied levels of activity and double digit
* b/ C5 y0 o$ v+ jprice gains observed in the energy and commodity rich Western provinces, and6 C3 f1 N6 A7 ^. i; P
more reasonable sales volumes and moderate price appreciation in Ontario,: x* |0 ?! V/ Q7 s
Quebec and Atlantic Canada, according to a report released today by Royal3 t: {: w) Q: H) Z: X
LePage Real Estate Services.
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Nationally, market trends established through the first three quarters8 L- A3 x# Q) b% a! U( X
are forecast to continue for the remainder of the year. Robust economic
/ e- C5 \( ^* Rconditions, low unemployment rates, modestly growing salaries and wages, and0 C5 M* M% z- w3 y" A$ \) l" y
sound consumer confidence contributed to the overall strength of the
\# {$ F; h* v+ [% e$ v( Mresidential real estate sector.7 T3 }8 h$ B/ q
( r) j7 D: i9 `8 s9 H# M' D4 x" U Of the housing types surveyed, the highest average price appreciation* v0 W1 a$ W/ y1 w6 @/ V2 @
occurred in detached bungalows, which rose to $300,365 (+16.3%)
! u6 K) \/ @' _9 B g: |year-over-year, followed by standard condominiums, which rose to $211,562* P9 p5 M2 s3 i' H, i1 Y
(+14.2%), and standard two-storey properties, which increased to $365,380
3 y) e. i! j% }(+13.2%).+ r. Y: g5 T5 n5 H1 ^
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"Canada's sturdy housing market continued to demonstrate steady growth
! `4 I7 m5 D; ]3 ?* |8 E, X! ?during the third quarter. For all but the west, we have moved on from the& @# l, r6 ~7 P8 J5 Z
frenzied expansion that characterized the first half of this decade, and are
2 m2 Q$ D2 p4 xpoised to show continued growth at a more moderate pace," said Phil Soper,+ ~% l6 `- S0 t
president and chief executive officer, Royal LePage Real Estate Services.1 S, q0 N9 Y4 {- E$ D( A
"Gone is the sellers' market that we have lived with for some years. We& z* S: o% G5 C5 Z- { ]! |
welcome the more reliable conditions that are characteristic of a healthy
. m0 ]2 t/ X1 [. k8 Q3 Wbalanced market."! p- f9 @6 l, q" ?- n* R: ~, F
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Despite the double-digit rise in average national house prices,
$ I& V9 \/ k+ K1 |6 Tconsiderable regional variances were exhibited again this quarter. The shift
7 s' S: G3 T" r* A7 U Jto balanced market conditions, which began in late 2005, has continued
+ }! d2 i) V0 I( \throughout most of the Central and Eastern regions of the country. In the core# q" N0 s( a; Y5 E! e$ o) z
energy producing western provinces, the combination of very high in-migration,) z9 y( D7 F+ S7 J3 `5 l
manageable affordability, and a shortage of inventory has driven record( j, j8 u* Z9 |# S6 q
breaking price appreciations.9 g% o0 r& J! ]! u
5 F v1 A2 c/ Y! ?. ^. [$ ` Echoing the second quarter and supported by Alberta's rapidly expanding. f3 e; O- C, p
economy, Calgary and Edmonton led the charge of Canadian cities with the
5 F! V0 z4 M, M; t! p9 Ilargest house price appreciation in all housing types surveyed.+ v. @4 B& G! }2 D! Q- J6 ?
( b" f. e1 h8 I" M! r/ I i In Ottawa and Toronto, growth remained steady, supported by solid
' ~- R$ F' B/ b) }8 H2 eeconomic fundamentals, an increase in available inventory and strong consumer1 R: x) o0 X: A7 \
confidence. While the pace of price appreciation in Ontario leveled off
* F% M, p9 Q% W6 Oslightly, the province's real estate market remains poised for modest growth.4 K0 y `0 j- p1 @/ U7 p+ q: r. V
In Atlantic Canada, new housing and condominium construction offered buyers
/ z l: r7 J' w( Ggreater selection at more competitive prices, resulting in a slower rate of
5 X( s5 |- U# |$ S: I% B* G/ Yprice appreciation when compared with 2005.
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While the pace of growth in Canada has slowed, the domestic housing% `& p& b4 A9 P) |
market is expected to outperform the American market. The economic and
! e" @$ S. k5 E: Yfinancial fundamentals driving the residential real estate sector in Canada
- R: p5 L9 g; {are markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the( s- Z* ~- _, u
American market through 2007. A number of factors are working in Canada's
. ^6 x+ O) c0 R. o0 B3 _" @; cfavour, including healthy personal and governmental debt levels, the5 o8 X# S8 I+ u" v6 U
relatively modest rise in interest rates in our country, and general
1 I5 [. a/ L' B/ |+ e1 gaffordability in our major cities. In addition, Americans are now seeing the
$ I, |4 l! c3 x6 edownside of a tax system that encourages maximum homeowner leverage, and- l \6 _8 m5 L# P; n
aggressive financial products such as zero- and negative-amortization) ^2 G3 [. |& \0 p* b6 N
mortgages that work only in a high price growth environment."
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. K- h4 s! p& T; ]0 z) n( C6 w REGIONAL SUMMARIES, m/ S k& f* n
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# f* u# ~* |( m7 q: g9 M6 W Balanced conditions continued to characterize the housing market in; p$ M, J0 p$ {' I6 Q( Q9 k' N
Halifax, as significantly higher inventory levels helped to moderate the rate
$ ]7 K& {/ l6 ?# L) y) _2 Tof price appreciation. Buyers were increasingly choosy, taking more time7 T+ ^+ E1 X H0 v9 d) z2 Z" ^
looking for newer, low-maintenance properties that were not in need of
! F Q9 I8 c. ?! g' ]! t0 Z$ ]" Irenovations.+ _5 V# X* w: A; T9 y
/ Y8 N8 }, ~8 Q The housing market in Moncton remained healthy and strong as a slight
% f8 p! k* M: z* r/ Pincrease in inventory helped to moderate the rate of price appreciation, [* [3 o) ?8 H) \2 e0 A
compared to the same period in 2005. Activity was brisk throughout August and
, Z! ~$ d3 u% Q% @September and is expected to remain this way through the fourth quarter.
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7 f! x3 j7 a# Y4 `4 Z, N; T$ d4 g The housing market in Saint John underwent its traditional summer
" f0 m$ ?4 h' B! j" E# O% @slowdown in the third quarter, with activity picking up towards the end of the! d. V2 {3 z& r: b
quarter. The local economy continued to thrive, as construction on a new
C' n5 u( A% [+ q- n* Y600,000 square-foot shopping area has begun, bringing several new box stores
( y+ N" j+ ]5 h6 }, Ito the area. Buyers have begun seeking less expensive fixtures for their homes. L5 F5 M, \9 V9 {' O3 c
and are instead opting for more affordable housing options.
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: m6 ~8 Z% l+ d$ G2 I. p4 a. A In Charlottetown, the housing market started to move towards balanced
0 p* y' O4 v( j- j$ I/ u0 [conditions, as some sellers had to begin to lower the asking prices on their8 U. E- a" m( \, c
homes to make them more competitive. Activity from out-of-town and US buyers
" K, V5 d) s- j/ o! Dwas down slightly compared to 2005, likely attributable to the strong Canadian
+ U' }1 m/ O2 ]. _7 cdollar. Inventory levels began to creep up in the third quarter, providing u% J2 Y+ {2 c
buyers with more options when looking for a home.
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Activity in St. John's slowed slightly in the third quarter, particularly
6 r% k3 r3 C6 Z. q9 Q( {among higher-priced properties, where there was a slight over-supply of homes
) V i4 B2 }( \/ H; Apriced over $200,000. Listing periods have increased when compared with 2005,' \0 J& R% n; s* ~5 I6 I
as some of the pent-up demand that had characterized the market over the last
( N _% v# E7 g* f8 P7 J# Ifew years has been satisfied, resulting in more normal, balanced conditions.8 g6 j$ L& s) ?, H' _" O
* M% `' B- _% h# k$ g Montreal's housing market recorded modest increases in average house
4 E9 |1 {& d; W- U: X/ j+ f. v5 Gprices, due to a slight seasonal slowdown in the third quarter as inventory0 [1 W" |0 k0 K
levels rose. Part of this can be attributed to the fact that many renting! E) b2 G- d, m Q, c9 o6 {9 h
first-time buyers were motivated to close on the purchase of a home by July 1,
/ C/ E/ B/ G" ~$ ^9 c: g3 e3 owhen rental leases expire in Quebec. Once this date has passed some of the) z# ^7 V( {5 i
pressure is taken off the market, allowing buyers to visit more homes before: `) ?. v& }" F
making a purchase.
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Ottawa held its position as one of the country's most stable housing
u1 K3 B- s( A: [+ Emarkets in the third quarter, reinforced by a vibrant local economy and strong1 n9 L# h2 r% k
confidence, resulting in modest increases in average house prices. The city
5 b* o0 _: Q2 P+ `. u; Scentre remained a bright spot in Ottawa, with homes in this area attracting
5 m6 f% L' X; k3 Gattention due to their convenient location and proximity to downtown
8 t$ {5 {+ a* X, P' wamenities.
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: X; ]6 J5 F5 ]# z3 v The housing market in Toronto sustained healthy activity levels
: n6 l ?6 o. C" g3 a; ?throughout the third quarter, as a strong economy helped to maintain demand
0 r& Y, @* j# k4 V$ _$ B4 _across the city, causing average house prices to rise moderately. Toronto has
( w5 z3 B* m7 u* u4 ycontinued to experience modest growth in average house prices, and has been
9 m% h3 I* |; p# f5 v" r: M) V. E0 Rdriven primarily by purchasers who are buying homes as their principle
- O m+ x' {# Q# W, oresidence, rather than for investment.
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The vibrant Winnipeg housing market continued to show its strength as- @: B. i8 [6 g6 J. _
house prices rose during the third quarter. The booming local economy resulted
! `- a) C7 w( i4 F8 q, @. @in a historically low unemployment rate, helping to bolster consumer3 I+ E" D% g L- r% e5 U
confidence and Winnipeg's ranking as the city with the lowest capitalization
9 P' a* z/ ~* a* b Frate among the country's larger cities - helped to encourage buyers to enter
5 [) u" g7 x' b; S3 Pthe market., q6 c/ m- q J# X) S
& a0 [0 ^- x9 h3 T* f' | In Regina, the market experienced a slight seasonal slowdown through
" O/ ~9 N/ R. RJuly, as there were fewer purchasers in the market due to summer vacations. In. y' B+ ^- T7 @9 E6 U. m9 u
August, activity resumed to the busy pace previously seen in the spring
- p) O# Y9 W1 wmonths, as the influx of purchasers made it more difficult to find a home due$ e9 O5 x: U6 D0 z2 K
to the shortage of available inventory.' D( ]' B4 J( s: \# f9 g, V: h
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Activity in Saskatoon remained brisk as the market maintained its# k( ^3 X1 f: q# A0 f
momentum from the busy spring sales period. The economy in Saskatoon remains2 H) Y" u- I1 s9 G) G3 B
vibrant, as employment opportunities are abundant with many businesses+ n8 T4 U9 v3 y ^8 x1 m# l7 }
struggling to make hires and having to recruit outside the province.9 ^5 g3 r( K0 k2 {# ]; M' c
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Calgary's housing market recorded blazing average house price increases) w% e* p( U G8 G. a
in the third quarter, in all surveyed categories. The burgeoning economy, low1 v; _6 U, q) g3 N6 z, Z
unemployment rates and low inventory levels remained the leading factors that: x$ l, ?" h- q1 Z
pressured Calgary's house prices upwards. However, regardless of the soaring
1 \: l, ?1 k7 z& Zprices that characterized the market - even during the typically slower summer; | j( m# d. ?$ w
season - it is expected that activity will become slightly more balanced, as5 I4 T+ U, `2 J& V) r8 `1 Z
buyers are becoming more reluctant to participate in the frenetic activity.$ R* O5 H7 E) c' J8 o
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Edmonton's booming local economy continued to thrive in the third quarter4 u6 M& b4 ?, x- m
as activity in the oil sands north of the city continued to flourish. Edmonton
% T9 z2 a: c5 b* n a" {7 \9 S0 Wremained the hub of activity for those coming to work in the oil industry,5 d4 w- X0 y+ B, N3 E
maintaining tight inventory levels across the city, resulting in prices
# B+ u; z! i% y' I4 xincreasing at record levels. However, as inventory levels continued to improve; u' ]# w# Q, `: c) [
in the third quarter the rate of price appreciation should moderate slightly7 }) `, v$ r* z c5 [
towards the end of 2006. ' X9 H, J# s% b5 }- r; T
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While Vancouver has seen a slight reprieve from the severe shortage of
6 H4 ?6 O8 u$ w3 v" @9 N1 M: Ninventory that had previously characterized the market, supply is still unable
* p& j# r$ H; |( V; i# yto meet demand, driving house prices upwards. Vancouver has a very diverse
# e& n$ E' w4 a7 V& q4 u/ A1 `group of active buyers - from first-time home buyers to baby-boomers to
# _3 i. M2 \* ~0 G X0 @1 |9 K7 ^foreign investors - all of whom fuel the demand for houses, placing added6 ~5 f7 g* w' m8 n, S
pressure on tight inventory levels.2 v3 {& r5 m8 m( y
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Victoria's market is vibrant and supported by strong economic
0 L+ l1 b2 B9 C6 Y1 Ffundamentals, fuelled by a booming tech sector and a migration of young people9 ^% O8 x0 W' o/ f/ W/ A
into the city that has continued to support the area's house price increases;
, O0 ^9 r2 [# J, r0 b( Rwhile increased inventory levels have afforded buyers more time when searching
0 D: p1 @ l8 r4 r( Cfor a home, helping to normalize the market's pace.
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4 U* ~! K7 V% u7 W Survey of Canadian Average House Prices in the Third Quarter 2006
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; r _' ~3 `4 [' j -------------------------------------------------------------------------- V' {3 c# k: i! Z: c
Detached Bungalows Standard Two Storey
8 P+ \ b1 j/ ?5 g* @4 e6 L6 O; ~3 d -------------------------------------------------------------------------6 M; G) C6 L8 M% L% F' ]0 j- h
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3: I7 J4 [; N" @6 g
Market Average Average % Change Average Average
3 g/ Y! ?% e! }7 h: l -------------------------------------------------------------------------) ]& Q* h+ [5 o7 Y/ Y! Y. m
Halifax 186,333 173,333 7.5% 198,667 199,000* S* ~3 V8 ]/ H+ t- j
-------------------------------------------------------------------------
! V. l4 n: c0 |! M/ \) f Charlottetown 145,000 141,000 2.8% 175,000 170,000
2 l+ b3 Y/ b, g! @! H -------------------------------------------------------------------------
! }! T( n* V, W3 x4 s9 h2 ? Moncton 135,000 127,000 6.3% 129,000 123,000" P+ X% A8 ?, v0 U! ~
-------------------------------------------------------------------------8 t M$ F5 N! p
Saint John 141,200 142,900 -1.2% - -
- @! R8 D9 {* o& H5 D -------------------------------------------------------------------------; B Q& \0 ]* U. [: ^
St. John's 143,667 142,667 0.7% 200,667 202,333
; Q6 n5 h9 k* d+ T' q6 f -------------------------------------------------------------------------
6 G8 k" V. g/ U- y" ~. h; k Atlantic 150,240 145,380 3.3% 175,833 173,583
0 W' ~$ d3 R4 V8 f9 Q -------------------------------------------------------------------------4 U# c9 F' b. V4 c
Montreal 213,691 203,500 5.0% 321,141 316,1853 q# K" ^. q) G4 F: ~# v# C
-------------------------------------------------------------------------
$ ]8 V. ~0 V$ n4 W# z9 g* J Ottawa 290,083 278,417 4.2% 285,667 273,250
4 S( {# P+ @# M/ D$ S9 E1 x -------------------------------------------------------------------------' _; u: O9 G+ a7 h6 J
Toronto 373,368 355,882 4.9% 481,523 474,766
' |/ T: N% ]) {- C7 \' e -------------------------------------------------------------------------
9 V: }0 o$ v$ }( ?7 x Winnipeg 181,579 159,860 13.6% 202,337 180,707
7 t5 L# o5 r, X7 d9 N. k -------------------------------------------------------------------------
% ]' @ \: d+ ^ Saskatchewan 170,667 156,083 9.3% 182,600 166,500
, p) w* E& V! g -------------------------------------------------------------------------
& A( h* N, }1 s C$ u4 V Calgary 395,067 252,411 56.5% 405,778 264,389
& l" s$ o, k( [& t -------------------------------------------------------------------------
& {- D. J j4 E Edmonton 286,857 194,857 47.2% 316,429 206,714
l" w- Q: J/ |% h3 |6 x" {# E -------------------------------------------------------------------------
/ |* R2 R- d- N5 ]9 {) F Vancouver 704,250 601,000 17.2% 794,000 697,500 m! P; ]; [3 {
-------------------------------------------------------------------------3 j7 @" j& U2 C! G. E* E
Victoria 375,000 348,000 7.8% 403,000 391,000. h/ T$ _. G; E% }" a/ ]
-------------------------------------------------------------------------
5 @( A9 I+ |/ @: x- x, t National 300,365 258,202 16.3% 365,380 322,860
! c- O6 b( [; C+ B0 |& M# _- w0 E -------------------------------------------------------------------------- s9 L! \$ T8 ~8 i b2 v3 O
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-------------------------------------------------------------& c2 n4 Q5 E4 [0 Q* A0 Q
Standard Condominium
+ u# f4 @* ?0 z# F' Z -------------------------------------------------------------
+ t" X9 k! r0 P5 X) X6 J 2-Storey 2006 Q3 2005 Q3 Condo
# k y1 j$ \4 [ Market % Change Average Average % Change
2 o" A/ } f7 j -------------------------------------------------------------
8 a& _; M' W7 H1 D Halifax -0.2% 142,000 103,000 37.9%
5 M1 @# ]) h/ z- L: ^ -------------------------------------------------------------
/ c: h% s3 _2 Y* p+ b! {0 E& T3 { Charlottetown 2.9% 98,000 98,000 0.0%
8 m* E2 `) _' _) g( a W -------------------------------------------------------------- c: D1 ]/ H1 I% y% x! w B
Moncton 4.9% - - N/A
. |5 Z! f7 f4 h4 ~ -------------------------------------------------------------
" [% F8 b6 b) v& y Saint John N/A - - N/A. H6 P% F0 @8 F( z/ A O" S$ x3 u
-------------------------------------------------------------
5 e* q+ C, i0 Q0 E: M0 K6 F St. John's -0.8% 146,333 145,667 0.5%
2 ?& K+ W: u! `1 z: E, L+ z -------------------------------------------------------------
4 V6 r" b6 P; r( ~8 K* U Atlantic 1.3% 128,778 115,556 11.4%, P" }: g1 s! v+ g' [
-------------------------------------------------------------/ _, [/ }4 M* e
Montreal 1.6% 193,190 188,016 2.8%
) o. _! L- ^: H+ S' Z+ ^ s -------------------------------------------------------------7 F/ l, J; q" W/ a( O& h* R
Ottawa 4.5% 181,083 172,250 5.1%
& k: i, N' m9 Y" j' z -------------------------------------------------------------
! i' s" e, y) S7 b! P Toronto 1.4% 252,088 242,918 3.8%) G9 n. W- Z5 r
-------------------------------------------------------------+ J$ M1 I4 F7 H( L6 v0 \0 O; E* h
Winnipeg 12.0% 105,648 96,008 10.0%/ K6 _3 y A2 j3 W6 ?. ?
-------------------------------------------------------------
4 e. T* J2 z( P Saskatchewan 9.7% 106,250 101,000 5.2%6 L/ \4 ?$ H5 t
-------------------------------------------------------------4 P. V- d$ D4 l1 M
Calgary 53.5% 245,844 153,867 59.8%/ @8 u7 J/ i/ C. Q9 q
-------------------------------------------------------------
, m" C& j# T [7 Y Edmonton 53.1% 200,433 131,500 52.4%2 s) L% c Y$ N! V. |' _; G- k
-------------------------------------------------------------: y1 d3 o$ C. y. X8 P' m0 \
Vancouver 13.8% 366,250 323,250 13.3%
; e/ H7 b% S& D3 z -------------------------------------------------------------
+ F+ Z, ?% c; M. k0 u; ]' m Victoria 3.1% 229,000 220,000 4.1%9 d+ V, t. r0 B3 ]5 E8 t
-------------------------------------------------------------
( Z& y* v8 t8 D/ h; Q8 s" f National 13.2% 211,562 185,296 14.2%0 t& a/ U: e# Q& Z9 F/ f
-------------------------------------------------------------& x& A# l. u4 J# a8 f" i: e
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Average house prices are based on an average of all sub-markets examined
( v; |# {: `1 p5 |( xin the area, except for the smaller markets of Charlottetown, Moncton, Saint2 j3 k/ `% b! _" g$ K, N
John and Victoria.) G9 K3 \& D/ |3 q
6 c' K! e; _& j
The Royal LePage Survey of Canadian House Prices is the largest, most2 i8 W% q6 a. Y6 [& H9 ^) \
comprehensive study of its kind in Canada, with information on seven types of
4 L- I2 g% [2 g/ `8 Phousing in over 250 neighbourhoods from coast to coast. This release
$ x( I. {6 d2 R. Areferences an abbreviated version of the survey, which highlights house price0 H! a' H5 q5 o9 N
trends for the three most common types of housing in Canada in 80 communities
- L5 y1 }/ B3 h; T$ ]across the country. A complete database of past and present surveys is, S7 ~% J& R4 H2 ^
available on the Royal LePage Web site at www.royallepage.ca, and current3 z& v$ f' s/ C3 F3 m& L* |1 y
figures will be updated following the end of the third quarter. A printable
+ w8 C) X5 u" vversion of the third quarter 2006 survey will be available online on$ E& o/ Y g$ U7 c4 o7 @, n
November 15, 2006.
& ]8 @% H8 X! J8 J! ] Housing values in the Royal LePage Survey are Royal LePage opinions of
9 p+ L0 p7 D1 ^! l4 zfair market value in each location, based on local data and market knowledge
4 l4 T: s1 C: P/ h( I4 F) Bprovided by Royal LePage residential real estate experts. Historical data is
2 N4 t( J0 j3 C& ~/ ?6 ~available for some areas back to the early 1970s. |
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