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Canada's housing market both vigorous and stable
* J0 }: Y: o5 ]! J0 C3 L0 n) \; q" l+ D2 y. B& W. u+ E
- Country's market poised to show growth throughout 2006 -# c: J3 ~8 p% u7 Y3 `
5 r( [; V* @- j( X9 N! \, d* t* o# | TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market0 a$ [ L4 T: E6 S' Z7 L, Y) U
exhibited moderate price increases and stable unit sales during the third/ b+ s4 ~& D# Q$ v0 L3 M
quarter. Wide regional variances continued to be the dominant characteristic, z3 u# E w' J7 o5 r+ S' A. p5 B
in the market, exemplified by frenzied levels of activity and double digit
9 @* g. |) b5 E& Dprice gains observed in the energy and commodity rich Western provinces, and* d% l+ W N" e ]% |) q4 `
more reasonable sales volumes and moderate price appreciation in Ontario,
1 |9 \" x0 r( iQuebec and Atlantic Canada, according to a report released today by Royal$ M" w" R$ H1 Q, h, M, F
LePage Real Estate Services.
! w R, U' \6 H" \- I3 C% H( `$ ]
! X: E1 k( k) L+ r Nationally, market trends established through the first three quarters
. u) k# Z; W( t2 S7 X( b6 Pare forecast to continue for the remainder of the year. Robust economic
& r- n! {0 Z$ Hconditions, low unemployment rates, modestly growing salaries and wages, and/ i* d0 z$ ~0 X- S$ h5 m
sound consumer confidence contributed to the overall strength of the/ c2 E0 D A+ o; Q( p
residential real estate sector.% [ D' g' f, [( i2 K
) }. }9 L' r+ c Of the housing types surveyed, the highest average price appreciation$ R/ m# F: k3 C b3 h
occurred in detached bungalows, which rose to $300,365 (+16.3%)
# P7 {+ o ~8 Myear-over-year, followed by standard condominiums, which rose to $211,562; L l' D) V( g& V: E7 ]# O
(+14.2%), and standard two-storey properties, which increased to $365,3806 M2 I8 {6 T& u7 e4 e4 S9 `: h
(+13.2%).9 }9 S6 t, u# p- b; r T0 J
/ A$ V: J+ C' n/ A- ` "Canada's sturdy housing market continued to demonstrate steady growth* a7 X/ E, w0 }6 d1 m+ g) M
during the third quarter. For all but the west, we have moved on from the
7 X% Y q3 J+ i; m1 qfrenzied expansion that characterized the first half of this decade, and are2 g# q( P" e: F1 z* U0 b0 ]
poised to show continued growth at a more moderate pace," said Phil Soper, w" l: x' @3 L9 L( t! O# ]+ `& ?
president and chief executive officer, Royal LePage Real Estate Services.
: f1 w: _+ U W6 Z"Gone is the sellers' market that we have lived with for some years. We
_( D7 |; n2 }. a5 X$ twelcome the more reliable conditions that are characteristic of a healthy
% T' D* w! Z; u$ r% pbalanced market."
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Despite the double-digit rise in average national house prices,7 s( x3 j; R: v
considerable regional variances were exhibited again this quarter. The shift
8 b j% E7 Y9 `1 @$ j/ d! D0 hto balanced market conditions, which began in late 2005, has continued$ k) O$ D8 F: M+ ` |
throughout most of the Central and Eastern regions of the country. In the core5 U( v- {4 ~6 i0 t" G, J
energy producing western provinces, the combination of very high in-migration,
9 U% z* ^7 Z8 p! b/ U5 gmanageable affordability, and a shortage of inventory has driven record
- P* C* q! ~, j. M$ Rbreaking price appreciations.
, ]8 M, \0 c2 N N0 O" ^- l; m: T: F/ Z! W
Echoing the second quarter and supported by Alberta's rapidly expanding
7 z" d) |7 a) d$ {, Z1 Oeconomy, Calgary and Edmonton led the charge of Canadian cities with the0 O' H3 p7 D, f% {* K9 F( H
largest house price appreciation in all housing types surveyed.% O0 F6 H; T& p0 \5 K) J
: M2 \, G5 H4 D; `1 y! B7 b' @) }
In Ottawa and Toronto, growth remained steady, supported by solid7 r0 i, ^/ p' P A/ l" h
economic fundamentals, an increase in available inventory and strong consumer
- \) G& U3 d& y' }; {* \( ]- {# jconfidence. While the pace of price appreciation in Ontario leveled off# W g% ] S- Z2 ?# F
slightly, the province's real estate market remains poised for modest growth.+ h* K: R7 t# A, @3 Z! E# c8 g
In Atlantic Canada, new housing and condominium construction offered buyers
& y9 ?0 h' b+ Q- dgreater selection at more competitive prices, resulting in a slower rate of1 `" u$ K$ m9 A( O3 E. j
price appreciation when compared with 2005.1 ]: K6 M9 Z1 S4 D: {
' q, E* ], Z0 l7 ~ While the pace of growth in Canada has slowed, the domestic housing- c, h0 J8 f. K: G& D. p- k' J
market is expected to outperform the American market. The economic and8 j& L1 _1 F# P& i/ u
financial fundamentals driving the residential real estate sector in Canada
" N* B5 O7 B1 V$ f2 s6 Ware markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the9 ^$ _. t/ ^. v8 _3 I* F: }
American market through 2007. A number of factors are working in Canada's% ]! e0 H) h! L) |# q+ f
favour, including healthy personal and governmental debt levels, the$ k. g4 @* X. |! i$ c
relatively modest rise in interest rates in our country, and general
1 d& j& q! h, h7 B& laffordability in our major cities. In addition, Americans are now seeing the
/ d; S% f8 U# [downside of a tax system that encourages maximum homeowner leverage, and
+ | j" Y [- E0 v3 M; oaggressive financial products such as zero- and negative-amortization
) K6 H9 G/ U2 M1 z+ n- wmortgages that work only in a high price growth environment."
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<< |$ g2 ?7 w0 l) c
REGIONAL SUMMARIES! _9 ?/ U9 ~, }
>>
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Balanced conditions continued to characterize the housing market in
" c, F, S0 q$ vHalifax, as significantly higher inventory levels helped to moderate the rate1 H( J/ H+ d0 Y9 ?# N
of price appreciation. Buyers were increasingly choosy, taking more time
6 V$ |7 F; h" y$ a: j3 a5 T" Ilooking for newer, low-maintenance properties that were not in need of, e$ V) p; B% N
renovations.
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) u+ @; r+ e6 h; U* y# N8 W7 t The housing market in Moncton remained healthy and strong as a slight
/ ^$ B# p" d3 C+ qincrease in inventory helped to moderate the rate of price appreciation
- f3 P p7 I" V% P! ycompared to the same period in 2005. Activity was brisk throughout August and
0 S% F! F" f# [! `. CSeptember and is expected to remain this way through the fourth quarter.8 K4 q6 K4 u% g4 i, p- e5 P
. F& B& E' ]: [: j. X: N% H/ R- d+ H
The housing market in Saint John underwent its traditional summer; D/ ?5 J: G7 m5 T% B
slowdown in the third quarter, with activity picking up towards the end of the8 x2 a& p9 {1 r1 E/ J' o1 U& ?
quarter. The local economy continued to thrive, as construction on a new$ \, \% D9 \# k9 K/ ~/ h
600,000 square-foot shopping area has begun, bringing several new box stores
: `/ E2 g6 Y2 W# T8 w) b" T1 a: Lto the area. Buyers have begun seeking less expensive fixtures for their homes8 p. \/ M; e! Q+ A5 D! e" g
and are instead opting for more affordable housing options.
3 F9 ?7 N5 q O" D1 y9 P& b% D; d0 d5 J4 M
In Charlottetown, the housing market started to move towards balanced0 F$ g* d5 |6 f4 D
conditions, as some sellers had to begin to lower the asking prices on their
3 D+ I; D E1 F* `! l0 A$ jhomes to make them more competitive. Activity from out-of-town and US buyers: f7 U1 B; l; F- c/ }. U
was down slightly compared to 2005, likely attributable to the strong Canadian
/ S6 ?* \% B+ m" cdollar. Inventory levels began to creep up in the third quarter, providing& W# S# Z. {9 H8 q1 g z, U5 n
buyers with more options when looking for a home./ Z F' P4 G& d
8 s8 Y; C4 F. d" V
Activity in St. John's slowed slightly in the third quarter, particularly' g9 @( B; M' D; ^' u9 W/ D
among higher-priced properties, where there was a slight over-supply of homes6 v3 K& p d8 |" ?* i! g' O
priced over $200,000. Listing periods have increased when compared with 2005,7 \& j, Z6 M+ B$ A, L$ R; g" J
as some of the pent-up demand that had characterized the market over the last. e, k, k p9 Z
few years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house& S' i. {7 _0 s1 s0 ]; L8 j
prices, due to a slight seasonal slowdown in the third quarter as inventory! U% F8 V8 A% o2 K: G% E
levels rose. Part of this can be attributed to the fact that many renting
7 h7 i, E F0 [$ ^4 P9 _first-time buyers were motivated to close on the purchase of a home by July 1,
8 R/ [9 \$ ?5 R% u; S0 ~) dwhen rental leases expire in Quebec. Once this date has passed some of the2 ]$ }9 W& j( f
pressure is taken off the market, allowing buyers to visit more homes before
' m( G" J: E9 u. i4 p, H4 F5 cmaking a purchase.
! V1 k* z% x' q- n* ~) i: O4 X/ _- }1 U8 P) p
Ottawa held its position as one of the country's most stable housing
. C2 d( \: I/ @2 omarkets in the third quarter, reinforced by a vibrant local economy and strong5 i1 c+ r' N& e z, S
confidence, resulting in modest increases in average house prices. The city
, N* _% w8 A- h# M( V4 k7 F2 B* gcentre remained a bright spot in Ottawa, with homes in this area attracting
; ~( y& e1 F" |1 C8 U# U0 k4 wattention due to their convenient location and proximity to downtown3 v! j" H: R |( O, p
amenities.0 M2 t: O: Z4 _0 V8 m8 m: F6 W, N
' u7 l2 M3 x( x2 {$ p! }
The housing market in Toronto sustained healthy activity levels
0 s" V: c; O& ?6 Athroughout the third quarter, as a strong economy helped to maintain demand: F, D4 [/ u7 L% M/ M
across the city, causing average house prices to rise moderately. Toronto has7 ~$ L6 z; o9 D+ @. n4 W% n3 n0 Z
continued to experience modest growth in average house prices, and has been
! K& j) n/ P4 j# c. bdriven primarily by purchasers who are buying homes as their principle1 G$ `! R) H/ o3 H, ~9 ?+ u7 b
residence, rather than for investment.+ p+ k* d1 M( m/ X
+ p3 D! g2 M" E( j The vibrant Winnipeg housing market continued to show its strength as
( ~' w* N- l- N/ c0 q& k; ^house prices rose during the third quarter. The booming local economy resulted
4 n" Z8 w+ ~2 u" N( Xin a historically low unemployment rate, helping to bolster consumer4 E) N5 L" K% L7 J) f6 B7 W
confidence and Winnipeg's ranking as the city with the lowest capitalization
4 R) a3 ~ O+ I% N% N1 _rate among the country's larger cities - helped to encourage buyers to enter
" U h3 R2 ]3 Nthe market.0 G% H+ p6 Y* g( V7 R
) C: P1 J9 H# ~- c. C" k In Regina, the market experienced a slight seasonal slowdown through
0 j9 }, }% l! Q& ]9 \July, as there were fewer purchasers in the market due to summer vacations. In
/ O: f# v7 T" b& A j; mAugust, activity resumed to the busy pace previously seen in the spring
' W- z+ b9 g# \ Umonths, as the influx of purchasers made it more difficult to find a home due
* L; E+ ^" S- i6 m- R2 P9 Jto the shortage of available inventory.
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Activity in Saskatoon remained brisk as the market maintained its
7 [1 [: }2 g7 g" b: Q0 }1 J; Rmomentum from the busy spring sales period. The economy in Saskatoon remains) I: W" G# I5 G3 a- K7 r7 n0 P
vibrant, as employment opportunities are abundant with many businesses
% x4 G1 t" k( |% ?& X- Dstruggling to make hires and having to recruit outside the province.
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& F. d+ P7 ]) O7 [ C Calgary's housing market recorded blazing average house price increases& S( \4 r2 g" l5 H x- E$ o
in the third quarter, in all surveyed categories. The burgeoning economy, low. |2 ^5 ]8 m/ ?* x& b2 R% w6 I% t
unemployment rates and low inventory levels remained the leading factors that/ W/ t, y3 L( t( @7 t0 ?7 E
pressured Calgary's house prices upwards. However, regardless of the soaring; w, T$ [* o1 d1 t
prices that characterized the market - even during the typically slower summer
, `! i8 q, D6 Zseason - it is expected that activity will become slightly more balanced, as8 j( a& D+ {& Q" g
buyers are becoming more reluctant to participate in the frenetic activity.
7 N& u6 X8 q0 k" S0 u2 R
% C$ h/ `' W# h) B- \: [ Edmonton's booming local economy continued to thrive in the third quarter; E7 m4 f8 X7 t: e. T( s' I
as activity in the oil sands north of the city continued to flourish. Edmonton
' w0 `/ T+ s$ F% r2 R" y' e& rremained the hub of activity for those coming to work in the oil industry,
|' b$ a5 [# d0 H; g/ Ymaintaining tight inventory levels across the city, resulting in prices: }$ u8 B& q8 j! {) W
increasing at record levels. However, as inventory levels continued to improve
9 n \" @! @' min the third quarter the rate of price appreciation should moderate slightly
/ H7 e% C5 A5 U: v# jtowards the end of 2006. * L7 n8 O2 Y" d$ ^
, A! s- X9 J- VWhile Vancouver has seen a slight reprieve from the severe shortage of
( T$ P1 e8 }$ Einventory that had previously characterized the market, supply is still unable' Z8 a( ^/ ^& n+ Q
to meet demand, driving house prices upwards. Vancouver has a very diverse2 O. P. Y g |" h- Z7 c) A
group of active buyers - from first-time home buyers to baby-boomers to
' G5 x% l+ y" E! ~9 [foreign investors - all of whom fuel the demand for houses, placing added
6 i. T% O$ I4 ipressure on tight inventory levels.
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5 E; }& O* w9 o8 U! f8 o% _8 t$ G Victoria's market is vibrant and supported by strong economic8 @% o7 |0 ]3 ]) Z) R4 d$ T$ g! ]
fundamentals, fuelled by a booming tech sector and a migration of young people
) y- v4 A8 Q! h8 Z0 b8 s' q7 kinto the city that has continued to support the area's house price increases;: h [4 @4 u# j* ?% B$ { [
while increased inventory levels have afforded buyers more time when searching, ^, n" j0 ^0 G
for a home, helping to normalize the market's pace.
# k# X+ a# t$ L' g z" x
$ V0 @5 B- B* M- \7 Z6 w2 m <<# t' h9 ~1 y( S! _; Z
Survey of Canadian Average House Prices in the Third Quarter 2006
@* \( c; N9 |) H5 ]7 a- m. M. a" L1 G5 A, @4 d
-------------------------------------------------------------------------& x$ [" V4 R! G. B
Detached Bungalows Standard Two Storey
) H7 { v- @; B" F( f/ o -------------------------------------------------------------------------
7 y" J4 V2 P9 i! H3 k( r* i* m 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
. n7 u7 B6 J P& L+ `0 C; ]! D Market Average Average % Change Average Average
3 f+ N! g; F2 D9 ] E4 n7 t -------------------------------------------------------------------------' |! ~/ @2 Y5 l# c% W4 W
Halifax 186,333 173,333 7.5% 198,667 199,000
! T! x1 j( S. c _ -------------------------------------------------------------------------: ]' X* t% n+ m$ C
Charlottetown 145,000 141,000 2.8% 175,000 170,000
' M4 E9 H" c6 A1 f- ^ -------------------------------------------------------------------------7 U: a) }* \; Q# J
Moncton 135,000 127,000 6.3% 129,000 123,000
9 H! {- V- V( ~. r* R/ j5 X9 s -------------------------------------------------------------------------
9 Z* I Y* N O: i6 i Saint John 141,200 142,900 -1.2% - -
% ]. L% n( o" D7 ]5 E -------------------------------------------------------------------------
7 W/ R3 j" r/ }3 h St. John's 143,667 142,667 0.7% 200,667 202,3333 k: y& l. U* U+ ]3 B! K
-------------------------------------------------------------------------! C7 D! n0 u" v7 @, k# q" \
Atlantic 150,240 145,380 3.3% 175,833 173,583: f" m+ {+ X9 Y0 X
-------------------------------------------------------------------------: V$ ^" W( s. `
Montreal 213,691 203,500 5.0% 321,141 316,185% o/ _0 Q) A# Z$ I8 m' u
-------------------------------------------------------------------------) E/ i. g- |) A6 C
Ottawa 290,083 278,417 4.2% 285,667 273,250
0 {$ `7 N( E" ]% Y6 u1 T -------------------------------------------------------------------------
$ M" S5 I; ?. t @5 O! J1 v Toronto 373,368 355,882 4.9% 481,523 474,766
$ o3 K( z" `7 {) e9 e+ G; c7 S -------------------------------------------------------------------------# h8 s0 `0 K, B2 ?
Winnipeg 181,579 159,860 13.6% 202,337 180,707- Q! f, R( v O7 v2 \
-------------------------------------------------------------------------
. E) J) u4 M4 t$ a3 |; n3 D$ {0 L Saskatchewan 170,667 156,083 9.3% 182,600 166,500% K) n0 |0 `( m$ y1 G) g
-------------------------------------------------------------------------
+ w) J L2 e l! ? Calgary 395,067 252,411 56.5% 405,778 264,389. H4 b8 V) G. |/ L$ \$ ~
-------------------------------------------------------------------------
4 J" \! \# e; ~) Q. ^ Edmonton 286,857 194,857 47.2% 316,429 206,714$ f0 z' u0 ]4 x. F+ {! x! Z
-------------------------------------------------------------------------9 Y. q V& w+ e$ X! E1 L% L4 G
Vancouver 704,250 601,000 17.2% 794,000 697,5001 r' B. R F9 z
-------------------------------------------------------------------------
6 |1 u, d0 Q: s/ Y Victoria 375,000 348,000 7.8% 403,000 391,000( W' e, @. g! e# g8 E2 O
-------------------------------------------------------------------------% z" Y+ h* }& h8 @, Y$ f. l& x5 l
National 300,365 258,202 16.3% 365,380 322,860! f2 h* r& x; U
-------------------------------------------------------------------------
5 l6 v) i* ~- c# E+ H
, T1 D9 Q5 y4 ]/ y0 a: N" g9 b -------------------------------------------------------------
1 R. \+ ^1 W, G) N Standard Condominium! t, r1 Y# ^$ h: \6 l
-------------------------------------------------------------
1 A4 t( o. L' ^7 j 2-Storey 2006 Q3 2005 Q3 Condo% l& e& G7 n8 @8 F6 J5 c9 c' T
Market % Change Average Average % Change# O8 W; X6 D; f4 V9 }' t" a
-------------------------------------------------------------
9 g, [8 A4 ^/ R- g5 [! d Halifax -0.2% 142,000 103,000 37.9%7 }9 ~3 i3 ~4 w5 ^# S' {1 O
-------------------------------------------------------------
: h; y; _% |9 p, n3 ` Charlottetown 2.9% 98,000 98,000 0.0%0 U- O/ }2 v6 e+ i n4 @( E
-------------------------------------------------------------$ E; F! J4 h% w/ t6 d' A) J3 p
Moncton 4.9% - - N/A& K8 a. D( |2 A: {) {
-------------------------------------------------------------. u2 q% I3 u1 H0 w% R
Saint John N/A - - N/A
' ^8 c9 H4 X: D% p, Z- c* O -------------------------------------------------------------9 C" j( w5 j( V' x7 f
St. John's -0.8% 146,333 145,667 0.5%
5 r9 c% s0 k2 |& Z& l -------------------------------------------------------------
) [- U( m+ v# N" C; ^8 U+ F8 v Atlantic 1.3% 128,778 115,556 11.4%
( [* t- F2 w# s4 |7 w -------------------------------------------------------------' U& X' m# Z7 d& Q2 ^/ N5 o; L' _
Montreal 1.6% 193,190 188,016 2.8%
. g; G) N L" \) m/ N* X; f2 |+ M -------------------------------------------------------------2 m7 w6 R( V1 x P& c# B4 y
Ottawa 4.5% 181,083 172,250 5.1%
1 \* I# U7 t2 p5 `+ Q -------------------------------------------------------------
2 a" L+ q! u3 T Toronto 1.4% 252,088 242,918 3.8%( ~0 j* a* E! t3 M$ {, Q2 f
-------------------------------------------------------------% r( a/ M& G r5 b- T$ y2 [7 n5 o. w
Winnipeg 12.0% 105,648 96,008 10.0%
' M: z l2 Q6 T6 w( W2 c2 x -------------------------------------------------------------; \* Z) q4 U" q5 x8 x" V2 B
Saskatchewan 9.7% 106,250 101,000 5.2%
* g1 H6 u& t6 A- _2 |3 W+ ^' o ------------------------------------------------------------- J1 @: W c. P" Y9 m2 o' p
Calgary 53.5% 245,844 153,867 59.8%
- @, K9 m/ l( B5 O -------------------------------------------------------------
, |) E. |& F& U3 `9 h5 b Edmonton 53.1% 200,433 131,500 52.4%
6 V1 y) Y) ]1 L' B- ?8 h+ [ -------------------------------------------------------------' ?! W7 J# w( T2 G8 }" p4 p
Vancouver 13.8% 366,250 323,250 13.3%
5 ^" T+ u/ I; w4 j- K ------------------------------------------------------------- S8 D% R" L; v2 b: w- I
Victoria 3.1% 229,000 220,000 4.1%
: M1 Z0 X/ B$ ~ ^9 ~ -------------------------------------------------------------4 f* }; G6 ~, t( p) b5 v
National 13.2% 211,562 185,296 14.2%
5 t5 C+ Y3 ~: P2 | -------------------------------------------------------------
6 V, C- P9 D, R >>+ V! A4 H$ q/ G9 q& Y, b0 J% P
% b% Q; W5 `9 {2 L7 c7 c Average house prices are based on an average of all sub-markets examined
* Y: B; k* x ~" v4 Bin the area, except for the smaller markets of Charlottetown, Moncton, Saint
9 b9 ~2 G5 P' hJohn and Victoria.1 {9 I& b9 G+ T8 T J& z" M
$ Z% s. X' |( x$ V/ j The Royal LePage Survey of Canadian House Prices is the largest, most
" G/ ^" q1 |0 _& U4 Y2 ]comprehensive study of its kind in Canada, with information on seven types of& M1 c& |6 |0 t O# p5 [3 ~
housing in over 250 neighbourhoods from coast to coast. This release
! p! X! Y6 b) B2 ~$ u, z6 B9 Areferences an abbreviated version of the survey, which highlights house price
* [! R( g, D; V E0 d$ ?# o Ctrends for the three most common types of housing in Canada in 80 communities
$ w: _4 X1 @, L/ ?% B, o1 xacross the country. A complete database of past and present surveys is2 L' Z$ I; e; \% R
available on the Royal LePage Web site at www.royallepage.ca, and current
5 _& J' U$ g$ W @$ D4 V, dfigures will be updated following the end of the third quarter. A printable
) @& O$ y( I$ uversion of the third quarter 2006 survey will be available online on
/ C: I) ?6 P# f" mNovember 15, 2006.
! \ _, N- Z% F: Z' @ Housing values in the Royal LePage Survey are Royal LePage opinions of
( i2 y% K/ X7 v5 \fair market value in each location, based on local data and market knowledge
! x+ A, w0 [3 ~ Y) Pprovided by Royal LePage residential real estate experts. Historical data is
# A0 |5 v- U6 h. k7 D* g4 Mavailable for some areas back to the early 1970s. |
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