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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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* H5 {0 p8 l1 \4 \) R TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market3 f- A# x+ ]1 l6 b( |" a1 o
exhibited moderate price increases and stable unit sales during the third/ I8 V: L- b% S( e) R8 k2 d1 _4 s3 n
quarter. Wide regional variances continued to be the dominant characteristic
& [$ _) n& p1 e9 f cin the market, exemplified by frenzied levels of activity and double digit
b2 C& u3 x( g' D& vprice gains observed in the energy and commodity rich Western provinces, and" G, t, E( z7 M! g2 ~9 g
more reasonable sales volumes and moderate price appreciation in Ontario,5 t; o7 o9 Y" ?6 w4 _; k/ \7 p
Quebec and Atlantic Canada, according to a report released today by Royal
! ]6 f5 K. j* d9 jLePage Real Estate Services.
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1 w; q, F+ C$ h1 z* k3 d8 p0 Q Nationally, market trends established through the first three quarters
9 G0 U4 @* A+ b2 T! F- _4 D! {are forecast to continue for the remainder of the year. Robust economic
8 z; [6 x/ c& Z% U2 ?5 `conditions, low unemployment rates, modestly growing salaries and wages, and
& e6 d( k6 b8 y: t% vsound consumer confidence contributed to the overall strength of the
4 P- d0 ?( O% _6 ^; ^4 |- z: aresidential real estate sector.
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/ L8 n' s7 t# X. P5 ` Of the housing types surveyed, the highest average price appreciation
4 x' b1 U7 z- G! c% ^/ poccurred in detached bungalows, which rose to $300,365 (+16.3%); z! L3 X# ?) @1 h, G! s$ _
year-over-year, followed by standard condominiums, which rose to $211,562% E ?5 \* A2 e( [3 J$ ?. g+ b
(+14.2%), and standard two-storey properties, which increased to $365,3802 V7 _2 _. [) E% s" Z( D
(+13.2%).
+ R/ q# y& x" ~4 F9 b+ e
O& V0 C; a3 b& I% \! t "Canada's sturdy housing market continued to demonstrate steady growth* L6 H' ^( ^- v8 s8 |/ n2 B6 T9 ~
during the third quarter. For all but the west, we have moved on from the- B$ a1 X' m {) W9 o
frenzied expansion that characterized the first half of this decade, and are
. U+ b0 e. H) @- O$ }( G* `poised to show continued growth at a more moderate pace," said Phil Soper,
. V3 z6 ~9 a9 E) |5 ^; Wpresident and chief executive officer, Royal LePage Real Estate Services.% K# h2 F! V2 `' S' K2 w7 |, W
"Gone is the sellers' market that we have lived with for some years. We
. X6 D& i. _; c1 u% j% iwelcome the more reliable conditions that are characteristic of a healthy+ m7 _7 x& X7 \
balanced market."
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6 m' T9 N& ^; R: N7 R k Despite the double-digit rise in average national house prices,# o' b8 C2 D0 ^9 y
considerable regional variances were exhibited again this quarter. The shift$ K, u" E5 h/ S
to balanced market conditions, which began in late 2005, has continued$ A7 I! K T! y9 ?, r7 o
throughout most of the Central and Eastern regions of the country. In the core/ T8 b8 a0 g8 f3 ^
energy producing western provinces, the combination of very high in-migration,1 } G$ ~$ D9 Q+ {& H+ H* A
manageable affordability, and a shortage of inventory has driven record
$ q$ r* `$ D8 K* \; [8 v4 O4 kbreaking price appreciations.5 U2 F( C& O0 s, ~
. ]2 e2 e, A5 M' |+ z/ F8 F Echoing the second quarter and supported by Alberta's rapidly expanding' E0 ~* ?: ^- `* K
economy, Calgary and Edmonton led the charge of Canadian cities with the
+ o% e: _0 e" ~9 U; A4 Clargest house price appreciation in all housing types surveyed.8 z, A B/ n/ v/ U8 R' g
q4 |, Y9 }$ A/ ^+ | In Ottawa and Toronto, growth remained steady, supported by solid
7 U8 P8 x2 K' W- O% Leconomic fundamentals, an increase in available inventory and strong consumer/ T( P! Y% ~8 x0 s( |* d5 s; o- V
confidence. While the pace of price appreciation in Ontario leveled off
& B$ a6 e# D4 h. H3 G5 Lslightly, the province's real estate market remains poised for modest growth.
" \3 c& r) f. WIn Atlantic Canada, new housing and condominium construction offered buyers; T8 t3 Z' S- u0 n, [
greater selection at more competitive prices, resulting in a slower rate of
- H7 y/ d! Z/ n7 Q/ G# F @& Xprice appreciation when compared with 2005.! T/ e2 r- R4 w& A8 f: Z
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While the pace of growth in Canada has slowed, the domestic housing1 [: s! k2 r" t ~0 a9 }& L# v
market is expected to outperform the American market. The economic and* |# a* u9 |& A/ \ p
financial fundamentals driving the residential real estate sector in Canada
; K, W& n7 r. U' v% Uare markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the! P0 G6 D% F3 r0 l8 [7 q
American market through 2007. A number of factors are working in Canada's7 E9 d1 H, }, ~+ C
favour, including healthy personal and governmental debt levels, the( X* \5 S! E: u! K( J
relatively modest rise in interest rates in our country, and general9 t- [; n1 I5 \7 V5 |
affordability in our major cities. In addition, Americans are now seeing the
& g0 E& [6 K7 w Fdownside of a tax system that encourages maximum homeowner leverage, and
6 [9 t6 P4 x" z3 i1 Raggressive financial products such as zero- and negative-amortization9 q; @( c% j ` b# P- f( }, C. X2 k3 @
mortgages that work only in a high price growth environment."& {7 a- y1 y: X" x" C
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REGIONAL SUMMARIES$ _; g: @ ~* Y6 l* }8 S+ s1 ~1 s
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Balanced conditions continued to characterize the housing market in* g n3 X' {3 f! }; V
Halifax, as significantly higher inventory levels helped to moderate the rate% T8 n# B% K( p
of price appreciation. Buyers were increasingly choosy, taking more time3 }0 b! Y( q9 a# T6 n8 Y
looking for newer, low-maintenance properties that were not in need of2 X6 T# |8 W5 S4 f
renovations.
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The housing market in Moncton remained healthy and strong as a slight
0 z' D( s8 i" N2 V& m% W3 w2 \increase in inventory helped to moderate the rate of price appreciation
9 n) T: f+ m* S& Z* Vcompared to the same period in 2005. Activity was brisk throughout August and0 g& z5 e! E6 u ^' {& Z
September and is expected to remain this way through the fourth quarter.
% H( n f4 k. Y b
, h: F: O3 X5 J0 w The housing market in Saint John underwent its traditional summer- a( W6 b" L( {% }$ ] E3 P
slowdown in the third quarter, with activity picking up towards the end of the
" n( ]; \+ {8 q0 L# n9 ^" Iquarter. The local economy continued to thrive, as construction on a new: ^' {4 S4 X! `
600,000 square-foot shopping area has begun, bringing several new box stores8 y2 M- M6 O' |1 g' ]
to the area. Buyers have begun seeking less expensive fixtures for their homes
7 D! K- a T8 \/ K p4 F4 r) Rand are instead opting for more affordable housing options., i5 o; N, @ I
. L3 J) I3 ?. Z In Charlottetown, the housing market started to move towards balanced
8 B$ X- f- a0 R- H9 Oconditions, as some sellers had to begin to lower the asking prices on their% y# y8 f, u0 T+ O; `+ ?1 T( n" c
homes to make them more competitive. Activity from out-of-town and US buyers
' A# `+ Y% W/ {3 p, ywas down slightly compared to 2005, likely attributable to the strong Canadian7 ^, A0 x4 ]& J5 q0 [
dollar. Inventory levels began to creep up in the third quarter, providing
/ [3 p( j P: [9 xbuyers with more options when looking for a home.* D1 x1 [/ b: @
6 w# ^% _! k" s* }2 G! O Activity in St. John's slowed slightly in the third quarter, particularly
$ s" g; s2 X: oamong higher-priced properties, where there was a slight over-supply of homes% r; T# r, J3 P! M- x E
priced over $200,000. Listing periods have increased when compared with 2005,$ q# M; h B( E% G9 T
as some of the pent-up demand that had characterized the market over the last
6 | L' |- I, H/ T' I2 H0 Q4 Cfew years has been satisfied, resulting in more normal, balanced conditions. X$ d$ X" k- t
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Montreal's housing market recorded modest increases in average house i, o2 R; k. u
prices, due to a slight seasonal slowdown in the third quarter as inventory+ _( T; \8 @6 ~; z
levels rose. Part of this can be attributed to the fact that many renting/ p! k, A" |# s0 u
first-time buyers were motivated to close on the purchase of a home by July 1,# c9 k* x( X$ [' E- o% K& G% L- P
when rental leases expire in Quebec. Once this date has passed some of the
) r# o3 A* D' ipressure is taken off the market, allowing buyers to visit more homes before2 u4 ?' L0 h) C7 P& B5 |
making a purchase.+ ~* o4 Q& i/ C# [( t
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Ottawa held its position as one of the country's most stable housing
8 b8 T: \) V0 D" E/ \- Xmarkets in the third quarter, reinforced by a vibrant local economy and strong
# p1 n1 L0 e& r1 |0 \confidence, resulting in modest increases in average house prices. The city7 m4 T* P; }2 E0 t5 F
centre remained a bright spot in Ottawa, with homes in this area attracting! E7 P e4 t/ g
attention due to their convenient location and proximity to downtown
+ j+ b, r0 C: g1 jamenities.
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The housing market in Toronto sustained healthy activity levels
" Q/ ~* k. S T( p) Zthroughout the third quarter, as a strong economy helped to maintain demand; g6 E: Z; Q6 Y
across the city, causing average house prices to rise moderately. Toronto has
- g( n% E0 _9 ]/ g4 `9 f! pcontinued to experience modest growth in average house prices, and has been
6 G, a4 r# a; I6 F/ k! u/ gdriven primarily by purchasers who are buying homes as their principle
& @ ]; v. M$ j, v7 Yresidence, rather than for investment.
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The vibrant Winnipeg housing market continued to show its strength as* u) @' O7 S# t! `
house prices rose during the third quarter. The booming local economy resulted' G# Q; r# h% H! ?( X$ Z
in a historically low unemployment rate, helping to bolster consumer
4 M( z8 I( C8 M5 }confidence and Winnipeg's ranking as the city with the lowest capitalization
0 e" {5 H; y" X/ L2 \7 Hrate among the country's larger cities - helped to encourage buyers to enter; @5 I" w5 L( \/ T3 R
the market.
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5 f1 P7 |% H8 E5 F$ a4 X: x' j In Regina, the market experienced a slight seasonal slowdown through. V% t6 y2 k$ i
July, as there were fewer purchasers in the market due to summer vacations. In
0 y# q( V9 O9 ?: X8 jAugust, activity resumed to the busy pace previously seen in the spring. ]% W6 j* C5 \3 B
months, as the influx of purchasers made it more difficult to find a home due# Z9 W9 \9 A: {7 J
to the shortage of available inventory.
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Activity in Saskatoon remained brisk as the market maintained its
0 _% B* K0 G. ^1 g# W& O# N# Z/ F) Vmomentum from the busy spring sales period. The economy in Saskatoon remains
6 C" M5 K2 E: p" p# G1 kvibrant, as employment opportunities are abundant with many businesses
3 _7 X# _4 I0 l& h5 f& @struggling to make hires and having to recruit outside the province.
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0 G: v0 L! t& _% `& X Calgary's housing market recorded blazing average house price increases, U" Q3 a5 J$ _" t* X
in the third quarter, in all surveyed categories. The burgeoning economy, low
/ q' A \% i8 Q% D7 {unemployment rates and low inventory levels remained the leading factors that
8 g7 x2 M% d- E5 N* P8 I8 y" n H, qpressured Calgary's house prices upwards. However, regardless of the soaring
/ s/ s Z/ e( c4 l4 sprices that characterized the market - even during the typically slower summer, Q' L/ s) P1 a/ B
season - it is expected that activity will become slightly more balanced, as
; f y# r2 w. R/ V6 }- _. a( |buyers are becoming more reluctant to participate in the frenetic activity.. @7 ^7 i1 U' C! T
) O; `- T- p4 O6 q0 ^ Edmonton's booming local economy continued to thrive in the third quarter
; T) L, H" p$ J" b0 G8 d8 Mas activity in the oil sands north of the city continued to flourish. Edmonton0 T5 r- L* H# i1 W
remained the hub of activity for those coming to work in the oil industry,
9 C/ L5 ]! S' r" E! V, M" ]0 [maintaining tight inventory levels across the city, resulting in prices
" |3 y K# _6 E% `) T* h% gincreasing at record levels. However, as inventory levels continued to improve+ Y3 J' e6 R9 n. R) P2 J1 Q9 [
in the third quarter the rate of price appreciation should moderate slightly0 C! J. k a! {; Q/ ~$ Q
towards the end of 2006.
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2 o4 O: M5 |; i- fWhile Vancouver has seen a slight reprieve from the severe shortage of
6 w) y2 y c. I) D! [; }inventory that had previously characterized the market, supply is still unable( w- ~0 w' M9 D( u
to meet demand, driving house prices upwards. Vancouver has a very diverse3 s* Z/ S9 L1 A
group of active buyers - from first-time home buyers to baby-boomers to
* O- e) X! L. R+ w5 [foreign investors - all of whom fuel the demand for houses, placing added
" m y' g+ q( _- ^6 N* Epressure on tight inventory levels.
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Victoria's market is vibrant and supported by strong economic
# ^6 v2 Q( n- T& t2 L1 W8 Kfundamentals, fuelled by a booming tech sector and a migration of young people
+ n) K$ g% k8 o, w( l0 ~1 einto the city that has continued to support the area's house price increases;
7 a. X4 M7 {8 e) h/ W/ Lwhile increased inventory levels have afforded buyers more time when searching5 Q+ N( M- C2 X: a1 ~. A q' z
for a home, helping to normalize the market's pace.
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& X$ j. `' k, l5 `/ v <<0 W# g" S6 g) Z/ w8 \' f
Survey of Canadian Average House Prices in the Third Quarter 2006
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; j$ T5 z8 ]3 |# x% } -------------------------------------------------------------------------% R- R1 D" }$ I; _1 D5 {3 F5 ^- d
Detached Bungalows Standard Two Storey
1 e. \7 x6 S( P" }0 w" I M -------------------------------------------------------------------------
5 o" `( q( ~2 [: z 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
7 _6 J6 a. v) s2 d7 x Market Average Average % Change Average Average* Z6 `% O4 j9 t$ X+ l% p& N& u" X* {
-------------------------------------------------------------------------( H- t6 i/ v1 t+ q( S
Halifax 186,333 173,333 7.5% 198,667 199,000
* z3 Y# y. v$ @; R" T+ X1 q8 C -------------------------------------------------------------------------
( W" }) X- w3 y4 f; r7 N Charlottetown 145,000 141,000 2.8% 175,000 170,000
/ @( d0 e O8 ^; i: R' x( t/ A! E9 _ -------------------------------------------------------------------------
; z8 n' M+ p. E Moncton 135,000 127,000 6.3% 129,000 123,000
5 n W" } f" ~. N -------------------------------------------------------------------------3 a; r* C# i- N, x! u
Saint John 141,200 142,900 -1.2% - -
9 a5 x" \1 \8 ]- N -------------------------------------------------------------------------
8 B; [) m3 O5 t& s, _8 a# M St. John's 143,667 142,667 0.7% 200,667 202,333) E9 t) F3 g; m: C) w+ p
-------------------------------------------------------------------------; B6 U( \4 C2 [( ]
Atlantic 150,240 145,380 3.3% 175,833 173,583$ Y9 l! M0 W% W2 k0 r- H- f6 U" ~1 x/ h
-------------------------------------------------------------------------# J% n* D7 h8 A
Montreal 213,691 203,500 5.0% 321,141 316,1856 p& X8 C- d: A
-------------------------------------------------------------------------
- Q' ?2 K L4 h, t0 A# a Ottawa 290,083 278,417 4.2% 285,667 273,2507 ~! c1 \0 F4 N# f( U
-------------------------------------------------------------------------& |" U) j- G3 A5 h! z+ y4 R
Toronto 373,368 355,882 4.9% 481,523 474,766
; W k- [& o2 a# W4 \- K u -------------------------------------------------------------------------
8 L. d; }- P7 B2 T2 o, E/ I/ Y Winnipeg 181,579 159,860 13.6% 202,337 180,707/ A# T8 S8 p7 ?- ^" I' R4 K. R0 g
-------------------------------------------------------------------------! s: n3 ?% @3 T( e3 ?
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
$ D! E- `2 T: h7 x -------------------------------------------------------------------------! W2 I% {& o% ^3 L0 \) x, M7 P' u
Calgary 395,067 252,411 56.5% 405,778 264,389
% r6 S. R8 ~- h( P3 M -------------------------------------------------------------------------4 y. o7 |$ h2 v5 U6 {
Edmonton 286,857 194,857 47.2% 316,429 206,714
+ R3 x* \1 V3 u/ k5 ]( \9 G$ J -------------------------------------------------------------------------' K( P3 }6 W3 {! ^5 J
Vancouver 704,250 601,000 17.2% 794,000 697,500! q. h8 E: ?9 R- N
-------------------------------------------------------------------------" p# q" }3 g: K3 c
Victoria 375,000 348,000 7.8% 403,000 391,000" B. T$ W" N3 h& h7 O
-------------------------------------------------------------------------
7 P5 n' f, u+ v& n9 B0 x( s$ B National 300,365 258,202 16.3% 365,380 322,860* E/ Y* v9 ^5 ~' u3 C4 r) h. X Y
-------------------------------------------------------------------------
; v3 ^& q/ a, }. X( w' ^. [* m0 T9 A% \9 y/ I% Q
-------------------------------------------------------------; `' E+ C& u" e, q! a
Standard Condominium1 S, u5 g# g1 V
-------------------------------------------------------------( `) d& [5 t: V& O6 Q+ z
2-Storey 2006 Q3 2005 Q3 Condo
0 u: l! n3 O+ ` Market % Change Average Average % Change# B) n: I- s* \, l; ?, L
-------------------------------------------------------------6 {0 H9 ^, `+ F
Halifax -0.2% 142,000 103,000 37.9%
/ R- _' B8 d3 D, g -------------------------------------------------------------
2 ]' G+ R: ]$ | Charlottetown 2.9% 98,000 98,000 0.0%
- t$ Q3 ~% D ?7 b -------------------------------------------------------------
$ Y1 ^4 p( | t, a Moncton 4.9% - - N/A. Y( T( z! H2 u. O2 N
-------------------------------------------------------------
# m3 }$ D5 @3 @. k- ?" m# n4 U2 O Saint John N/A - - N/A
1 S- p+ i7 Q/ ~, e9 E7 ?- c -------------------------------------------------------------! T& A! p: A. g$ i2 a/ U- w
St. John's -0.8% 146,333 145,667 0.5%
, x0 j9 w. z m -------------------------------------------------------------
! t0 P) q8 z8 o+ J# ?9 ?3 L, [6 Z Atlantic 1.3% 128,778 115,556 11.4%
1 ?6 n g- l- |; y1 n% [! |$ z -------------------------------------------------------------
7 C) s$ G! \1 g. s w Montreal 1.6% 193,190 188,016 2.8%
" ]; ?/ Z* U; S* w1 R -------------------------------------------------------------
3 }" t, m! n+ ^& n: R Ottawa 4.5% 181,083 172,250 5.1%
% g V1 w0 f2 b -------------------------------------------------------------
: [8 _3 a- b$ e5 A Toronto 1.4% 252,088 242,918 3.8%6 t4 k! L' G% M
-------------------------------------------------------------
3 t8 L* O! Y3 E9 K# x Winnipeg 12.0% 105,648 96,008 10.0%
" ^+ J3 s- X, ?( z. r2 q; g9 L -------------------------------------------------------------2 J" C b0 c. n2 {* d5 [2 t* g0 c$ }
Saskatchewan 9.7% 106,250 101,000 5.2%
8 f. n: x4 k1 U" M2 z& e -------------------------------------------------------------4 z5 l' A* d- X6 I. }! L: Y
Calgary 53.5% 245,844 153,867 59.8%
% ]- {6 e# X9 P- L -------------------------------------------------------------+ ~4 I- `) ]& G: {8 P3 Z$ m3 b
Edmonton 53.1% 200,433 131,500 52.4% S# J0 t2 h4 m2 [/ s% i
-------------------------------------------------------------+ D3 ^' V1 a4 j/ F1 m( a
Vancouver 13.8% 366,250 323,250 13.3% T8 L" o! @# ]0 s- P1 T: M" e! V
-------------------------------------------------------------
7 r8 X1 ]' H* a2 t$ r7 v @ Victoria 3.1% 229,000 220,000 4.1%
) n+ L1 y+ a9 r$ [ q, X8 J; I -------------------------------------------------------------. e. z2 m; z5 W7 o5 M) O) U4 p
National 13.2% 211,562 185,296 14.2%6 r4 f8 s+ b% d5 i D
-------------------------------------------------------------
; y, |" C: o4 ^$ P* k >>3 L: X5 N0 n* R2 ]) c7 { l
x" O! P2 z$ H) ?6 T Average house prices are based on an average of all sub-markets examined: ]4 W& u: {3 p+ Z5 |# f' B
in the area, except for the smaller markets of Charlottetown, Moncton, Saint0 @; B7 c8 q! R, Q5 h+ ]
John and Victoria./ Y: q$ ?9 W4 X' d t* S; t
8 c( M7 Q' \8 i' G/ V' D1 w2 W% p' H( U3 R
The Royal LePage Survey of Canadian House Prices is the largest, most; w* I1 k0 I1 P4 P+ N* e- L2 u( I
comprehensive study of its kind in Canada, with information on seven types of
, I/ r* `2 J( h; Phousing in over 250 neighbourhoods from coast to coast. This release2 Z; q$ a( t( ^4 D# V
references an abbreviated version of the survey, which highlights house price
9 a: U( T" u" t1 F, R& ktrends for the three most common types of housing in Canada in 80 communities* M5 B0 ]* ~' l! x/ {' C3 d
across the country. A complete database of past and present surveys is; A2 E5 z+ n+ \) \4 U( |( _
available on the Royal LePage Web site at www.royallepage.ca, and current$ _" y3 Y6 }4 H' g; P
figures will be updated following the end of the third quarter. A printable
0 J7 ?+ N$ W; A, }8 Wversion of the third quarter 2006 survey will be available online on4 U- o4 S" R; E3 l4 M
November 15, 2006.# E3 G+ J6 F9 V9 M$ _7 B3 W1 T
Housing values in the Royal LePage Survey are Royal LePage opinions of
' U* T, Y( t' o; [2 A0 N- c) ^+ b! efair market value in each location, based on local data and market knowledge
" {! q1 |* ?# f$ A6 o* f& L, D4 Dprovided by Royal LePage residential real estate experts. Historical data is& U- p: q+ m g" Y
available for some areas back to the early 1970s. |
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