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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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1 a1 p8 |* l. J' q TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
. k" _1 q' M9 {9 [* Z+ Yexhibited moderate price increases and stable unit sales during the third
. Y3 J, Y2 m. {( e! V8 p6 `5 ^- Hquarter. Wide regional variances continued to be the dominant characteristic
+ Y G6 m# I. T1 q, K1 pin the market, exemplified by frenzied levels of activity and double digit w, h, k& q( `5 m' t( q" |- S& x3 e
price gains observed in the energy and commodity rich Western provinces, and
$ D, P9 t' B2 ^3 q( ~more reasonable sales volumes and moderate price appreciation in Ontario,
: o! G9 x, O1 I2 `, ]+ H/ Q4 |Quebec and Atlantic Canada, according to a report released today by Royal( |+ s( q5 \6 E/ I0 \; `$ J* j5 X
LePage Real Estate Services.7 H8 s0 u" @( }1 w
8 Z: y# T* Z3 t8 w Nationally, market trends established through the first three quarters7 n; h5 U- Z- c% F- s- }
are forecast to continue for the remainder of the year. Robust economic
/ C0 m2 o5 _ |. O. ~conditions, low unemployment rates, modestly growing salaries and wages, and
; R3 P" W/ z# ^. bsound consumer confidence contributed to the overall strength of the+ f2 t/ s! o3 o
residential real estate sector.
- z4 k% \$ y( Z$ C) d) t/ V6 j' L9 }+ r: K
Of the housing types surveyed, the highest average price appreciation
: m, [( |4 K1 {" D1 foccurred in detached bungalows, which rose to $300,365 (+16.3%)
- F0 ]! M- T( h( ?2 jyear-over-year, followed by standard condominiums, which rose to $211,562. ^5 p" P7 z& h5 ^$ B: ^
(+14.2%), and standard two-storey properties, which increased to $365,380
; N7 i: m* Q" A% G$ J9 u(+13.2%).0 R6 n1 a9 y1 B0 J! z5 B0 P! i
5 f; g* r' n+ O/ P1 Q
"Canada's sturdy housing market continued to demonstrate steady growth. D5 u8 \9 y7 E+ a/ A& y5 }; E& t
during the third quarter. For all but the west, we have moved on from the
' B% o! u; Q* s9 b8 `5 Ifrenzied expansion that characterized the first half of this decade, and are
5 ~1 S2 M, m, L9 E# Xpoised to show continued growth at a more moderate pace," said Phil Soper,0 _, n/ o- M$ c; z
president and chief executive officer, Royal LePage Real Estate Services.
' U4 U: Y( N0 {$ R"Gone is the sellers' market that we have lived with for some years. We7 @6 X u7 F, E ?1 b; S
welcome the more reliable conditions that are characteristic of a healthy- b' L o# A! E. H; V( Q% t
balanced market."
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Despite the double-digit rise in average national house prices,; h0 @* E8 t8 S# K
considerable regional variances were exhibited again this quarter. The shift: X7 e6 x' Y$ J/ T
to balanced market conditions, which began in late 2005, has continued
9 H" e* r: A( [; e, ~throughout most of the Central and Eastern regions of the country. In the core
4 T- n% t* ^3 }& j$ k# Henergy producing western provinces, the combination of very high in-migration,# L# I& r: T( _) q
manageable affordability, and a shortage of inventory has driven record
0 Z* x' X$ b, ^! c) ?breaking price appreciations.
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Echoing the second quarter and supported by Alberta's rapidly expanding
( d0 d$ U( n/ n& ieconomy, Calgary and Edmonton led the charge of Canadian cities with the
9 E: k; v# j) v' e$ c5 c: i. Glargest house price appreciation in all housing types surveyed.8 _$ m; b g6 z w" Z2 j
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In Ottawa and Toronto, growth remained steady, supported by solid
$ E$ I; y1 I& r L T. ceconomic fundamentals, an increase in available inventory and strong consumer
3 q! j2 @+ }: S; ]" w& rconfidence. While the pace of price appreciation in Ontario leveled off
. r1 y" E& d* I5 Zslightly, the province's real estate market remains poised for modest growth.* I, ^- f6 u/ h9 d6 {1 |
In Atlantic Canada, new housing and condominium construction offered buyers
) z; M# u# u- F* ]( h$ Bgreater selection at more competitive prices, resulting in a slower rate of& B3 m" b% G4 C. j
price appreciation when compared with 2005.7 v8 s# w+ J6 y7 P. `) R& a1 F) h- ?
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While the pace of growth in Canada has slowed, the domestic housing
: @' k1 Y1 i! ?* W0 ?- Bmarket is expected to outperform the American market. The economic and
2 U, t B" G( s7 |financial fundamentals driving the residential real estate sector in Canada
, ^/ S1 u8 J- v% h4 ?are markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the5 ^7 u; l4 [# ^, Q5 I' u; c( \
American market through 2007. A number of factors are working in Canada's
6 Y$ o$ d3 \. J9 D) Mfavour, including healthy personal and governmental debt levels, the
+ [0 V" T2 h# ]. F; Q9 I0 frelatively modest rise in interest rates in our country, and general
' w+ h* w0 [' M6 Uaffordability in our major cities. In addition, Americans are now seeing the
" \5 h- C; t* F) j& Fdownside of a tax system that encourages maximum homeowner leverage, and5 z2 R4 r8 @) {* S* T ?* l# j
aggressive financial products such as zero- and negative-amortization0 Q6 N. C: N. S: J, Y6 o" A1 B
mortgages that work only in a high price growth environment."
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REGIONAL SUMMARIES. Q! }' {' T5 w& d: w
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Balanced conditions continued to characterize the housing market in
% u, {& B6 T8 c5 x6 q4 ~% R5 hHalifax, as significantly higher inventory levels helped to moderate the rate
- [/ B2 c8 b; N oof price appreciation. Buyers were increasingly choosy, taking more time+ W) @# |9 l9 l/ S
looking for newer, low-maintenance properties that were not in need of+ V; K) r* B% N
renovations.
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The housing market in Moncton remained healthy and strong as a slight
5 A$ J7 ]6 _8 ?* D& V# P$ dincrease in inventory helped to moderate the rate of price appreciation% {& C; {9 A. _* @! c1 h; J
compared to the same period in 2005. Activity was brisk throughout August and' n. m; I: r6 d
September and is expected to remain this way through the fourth quarter.& ~& [) }% |" y
7 H3 @" l! M8 Q0 h) Y9 ~! X The housing market in Saint John underwent its traditional summer
: ?2 k& I9 e+ ?, m, Islowdown in the third quarter, with activity picking up towards the end of the; C7 g) v$ t, S- W5 i7 ^8 t1 M0 o
quarter. The local economy continued to thrive, as construction on a new( b7 g) E @& w t: m: U
600,000 square-foot shopping area has begun, bringing several new box stores* ~3 Q) L- I3 @ _
to the area. Buyers have begun seeking less expensive fixtures for their homes. n3 i; @ v6 e- o* }
and are instead opting for more affordable housing options.
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In Charlottetown, the housing market started to move towards balanced: u8 [1 V$ N8 o# C2 f, @, ~
conditions, as some sellers had to begin to lower the asking prices on their
! B- ?' Z1 A0 J }8 {" w- Uhomes to make them more competitive. Activity from out-of-town and US buyers
5 Q1 @- k9 S4 Y& _7 D3 m: s# R9 Dwas down slightly compared to 2005, likely attributable to the strong Canadian5 X- m! i/ O6 {# C4 h4 y, [* J
dollar. Inventory levels began to creep up in the third quarter, providing- j* W1 Z9 |- j# p6 f6 I7 V
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, ]' H" S; S- n
among higher-priced properties, where there was a slight over-supply of homes
1 Z5 O& c3 K! n; b- R6 Z7 y' vpriced over $200,000. Listing periods have increased when compared with 2005,
+ {8 e$ G g$ ~9 c6 ]9 b' cas some of the pent-up demand that had characterized the market over the last, V" s {8 v0 u; j: H) _
few years has been satisfied, resulting in more normal, balanced conditions.7 }( B( Z V% Q6 U2 a, ]1 `
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Montreal's housing market recorded modest increases in average house
% c! _4 u7 D- |* }0 P' D2 G8 `6 Hprices, due to a slight seasonal slowdown in the third quarter as inventory) M, E8 o) d- V. |# M
levels rose. Part of this can be attributed to the fact that many renting/ K1 L" N& M/ {* k8 m
first-time buyers were motivated to close on the purchase of a home by July 1,
, I, h" {3 Y( F: C7 w! e' lwhen rental leases expire in Quebec. Once this date has passed some of the1 ]5 _. E, _6 V# Q! h
pressure is taken off the market, allowing buyers to visit more homes before
0 O& `% _/ d9 }8 U* s+ X9 x, Tmaking a purchase.
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Ottawa held its position as one of the country's most stable housing
' @, ~: S6 R3 imarkets in the third quarter, reinforced by a vibrant local economy and strong Q, Y0 N' p* B. r8 l" z
confidence, resulting in modest increases in average house prices. The city! d( w! f: o8 U4 `* H; E
centre remained a bright spot in Ottawa, with homes in this area attracting
, Q. H# m$ g6 B& h% lattention due to their convenient location and proximity to downtown3 E; S, W$ T* ]5 l J' E* e$ G
amenities.; p; L2 [* X* ~8 s& E
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The housing market in Toronto sustained healthy activity levels6 O! X0 {5 R) |' I
throughout the third quarter, as a strong economy helped to maintain demand, ~" q* ? q% _8 T& B6 O* w& c
across the city, causing average house prices to rise moderately. Toronto has
' h$ ]1 E u1 j/ m! hcontinued to experience modest growth in average house prices, and has been! l8 \6 @" Y9 p! Q v, I/ s0 b
driven primarily by purchasers who are buying homes as their principle
8 J# z$ g- m$ \) m6 a% T: }5 x& bresidence, rather than for investment.
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1 z1 \/ W2 B3 t. } The vibrant Winnipeg housing market continued to show its strength as
! E$ f* j8 k) N) Vhouse prices rose during the third quarter. The booming local economy resulted
2 s0 B# u k' d; ]in a historically low unemployment rate, helping to bolster consumer
6 }! Z$ K1 Y+ C9 A" P/ D3 m+ u( nconfidence and Winnipeg's ranking as the city with the lowest capitalization
5 ?7 ^9 ]* h+ |5 q6 Grate among the country's larger cities - helped to encourage buyers to enter4 p& e/ z2 S- T2 F" C
the market.' K; Q/ h- ~) v# z! j8 Z' u
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In Regina, the market experienced a slight seasonal slowdown through/ O& z7 U2 {( c* O& Y
July, as there were fewer purchasers in the market due to summer vacations. In
/ [% }2 N0 C l2 h& j; \August, activity resumed to the busy pace previously seen in the spring9 J$ I3 l* s0 k) X; h8 t& S
months, as the influx of purchasers made it more difficult to find a home due
% h6 B" L7 Z' I: zto the shortage of available inventory.
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2 T1 ^: }, G. V0 t5 d1 c Activity in Saskatoon remained brisk as the market maintained its* e' M' X D7 M* v( F" C8 ^
momentum from the busy spring sales period. The economy in Saskatoon remains+ g1 ^0 a) m: D6 m. ]% O
vibrant, as employment opportunities are abundant with many businesses4 D4 I" D- H4 C, E
struggling to make hires and having to recruit outside the province.
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% l' m6 Z7 }$ w* Q/ k/ J _7 T Calgary's housing market recorded blazing average house price increases
: W* d( X2 k( ain the third quarter, in all surveyed categories. The burgeoning economy, low9 p+ Z( E1 o& ^6 N5 Y
unemployment rates and low inventory levels remained the leading factors that4 `0 r |& w: n: }8 B+ |/ q
pressured Calgary's house prices upwards. However, regardless of the soaring' ?9 S$ {! j8 z T8 j& b* J6 Q
prices that characterized the market - even during the typically slower summer
- w- _8 b; r$ }4 e y' Pseason - it is expected that activity will become slightly more balanced, as$ x, S5 D8 c7 J$ j
buyers are becoming more reluctant to participate in the frenetic activity.6 A1 K$ G. M3 ?/ u
% |* }2 p7 Q m& _ Edmonton's booming local economy continued to thrive in the third quarter/ u+ K( ^% ~' W5 o3 A9 S$ G
as activity in the oil sands north of the city continued to flourish. Edmonton
. S4 O: v+ ?$ [- B4 c, [ Iremained the hub of activity for those coming to work in the oil industry,. T. O8 G" G0 S4 {8 b
maintaining tight inventory levels across the city, resulting in prices7 q4 X9 o6 k' \* j- g
increasing at record levels. However, as inventory levels continued to improve, n* v; q+ L1 ]! L
in the third quarter the rate of price appreciation should moderate slightly
0 E# X L1 _: }9 f# {towards the end of 2006. 0 s; e5 c4 g! t, A7 h
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While Vancouver has seen a slight reprieve from the severe shortage of9 ~0 g( l, L0 O) K2 K& L+ v- t
inventory that had previously characterized the market, supply is still unable
* _. }) U9 Z4 G4 kto meet demand, driving house prices upwards. Vancouver has a very diverse
6 |% K% A! _* F% tgroup of active buyers - from first-time home buyers to baby-boomers to G; g& u" F( h& q ?
foreign investors - all of whom fuel the demand for houses, placing added
9 I$ B$ C' P3 [4 Mpressure on tight inventory levels.& F, v6 c( k# e5 Z9 |% v; Q4 c
H- H: e- I' `5 D Victoria's market is vibrant and supported by strong economic
/ K$ F7 Y" S2 Q* W' h: jfundamentals, fuelled by a booming tech sector and a migration of young people
, h( R& j. Z- W7 ?4 u C7 R/ ointo the city that has continued to support the area's house price increases;
* R* \! C4 \3 Swhile increased inventory levels have afforded buyers more time when searching2 K3 P6 B) O- q* i+ ] G9 J
for a home, helping to normalize the market's pace." b) `; a, e% b' E& c4 ]9 m
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Survey of Canadian Average House Prices in the Third Quarter 2006
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5 N/ ~5 J O& F -------------------------------------------------------------------------
% e& z% J$ s! ?$ o+ @/ K0 q Detached Bungalows Standard Two Storey% I5 D0 @0 Q, \' r$ E; X
-------------------------------------------------------------------------: B @& E( `6 T ]5 ^9 h8 f
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
: G6 V# |, w! a X Market Average Average % Change Average Average
5 n& h5 C- c) F2 ?3 j- }6 c -------------------------------------------------------------------------
& X- l! D& w- ~ ~ Halifax 186,333 173,333 7.5% 198,667 199,000! H; W4 ~5 S$ v7 }" Q: w5 v
-------------------------------------------------------------------------+ m/ E9 X1 G, ~7 N
Charlottetown 145,000 141,000 2.8% 175,000 170,000
* t4 R w; P( C9 @7 K9 m -------------------------------------------------------------------------
( s8 R0 [# E+ u& s. N$ M2 y& I# X Moncton 135,000 127,000 6.3% 129,000 123,000( ^8 K3 |& R8 i' v9 E
-------------------------------------------------------------------------* p2 M8 h: ^* z" _7 Q1 s5 f Y
Saint John 141,200 142,900 -1.2% - -
! u f6 |; N. ^ u) e+ D3 A! c -------------------------------------------------------------------------9 N- r q5 g' ~" l* D6 Y' ]' A
St. John's 143,667 142,667 0.7% 200,667 202,333
, E- |3 G% e$ @ R+ }3 v0 G+ h1 \ -------------------------------------------------------------------------( L. N& m/ m5 Q- j ?
Atlantic 150,240 145,380 3.3% 175,833 173,583
" \1 f, a! ]% B$ Z. `' N; v -------------------------------------------------------------------------
* V/ @1 Q0 K, V0 s, D! k Montreal 213,691 203,500 5.0% 321,141 316,185
0 S$ {* Y: d+ S: t -------------------------------------------------------------------------
/ Q3 r# e) q2 V+ \4 l Ottawa 290,083 278,417 4.2% 285,667 273,250
. n5 J" f4 j' c1 D( D& v -------------------------------------------------------------------------
1 [+ l' V1 v! n8 f; v$ _1 Z) T# ~ Toronto 373,368 355,882 4.9% 481,523 474,766
$ J, w( j3 L7 r; l: W -------------------------------------------------------------------------8 L% \, N. S9 N; B5 \6 L
Winnipeg 181,579 159,860 13.6% 202,337 180,707
; P$ r( l0 ], W8 c6 v5 F- } -------------------------------------------------------------------------
6 V. w9 v4 v0 [- H4 U w Saskatchewan 170,667 156,083 9.3% 182,600 166,500
7 Q& y6 p- ^- n: f -------------------------------------------------------------------------
0 V. W* G" e+ M Z* P5 I Calgary 395,067 252,411 56.5% 405,778 264,389
. A# v# G. y7 T9 x' o' {5 U -------------------------------------------------------------------------
& K7 [' z$ [2 X, c Edmonton 286,857 194,857 47.2% 316,429 206,714
5 |! e% ^# C- W. N5 I -------------------------------------------------------------------------
5 R( u# s" \% H0 w5 S Vancouver 704,250 601,000 17.2% 794,000 697,5006 m/ H5 R+ S+ \- W
-------------------------------------------------------------------------& x- e6 n: x! Z* y& r; P/ m( X
Victoria 375,000 348,000 7.8% 403,000 391,000
, _- i4 y4 x& N3 V; N -------------------------------------------------------------------------9 y; I* ~1 _) F2 l9 @4 v1 V9 p
National 300,365 258,202 16.3% 365,380 322,860/ J# N5 ~0 c3 U* y' p2 [/ B" k9 u
-------------------------------------------------------------------------) V ~$ ?4 f( e& [
4 V3 k- y* ?& g) i& y ]* I -------------------------------------------------------------. _- p8 X+ {! C* J- d# h
Standard Condominium1 k4 G, v$ H i
-------------------------------------------------------------/ |- J5 l2 e6 Z' x% l% y$ @( @
2-Storey 2006 Q3 2005 Q3 Condo% T$ F, c! Z, Y" Z& L) X: |" c: L$ |
Market % Change Average Average % Change
. O) M2 u; [, I- n -------------------------------------------------------------: |" v, t! h! o- g* o: K
Halifax -0.2% 142,000 103,000 37.9%' p7 e1 S' t- q5 M
-------------------------------------------------------------* t I1 i9 n0 y
Charlottetown 2.9% 98,000 98,000 0.0%
4 e# h/ |6 Z8 Y- E2 s -------------------------------------------------------------2 G% @% K, @ L. l% [6 C
Moncton 4.9% - - N/A! l% F' A0 T+ c5 m
-------------------------------------------------------------
; W+ g/ \ k, I, A( \, y1 p: D Saint John N/A - - N/A2 p" H, B. j; {9 Y' t& q
-------------------------------------------------------------
+ Q0 y! \/ o3 j# }9 v: Y. l St. John's -0.8% 146,333 145,667 0.5%! g! o6 U. P- H8 V0 t; A
-------------------------------------------------------------8 E$ f! N* d* l8 g3 o
Atlantic 1.3% 128,778 115,556 11.4%
& y7 ^# i9 ^; d" ^' O -------------------------------------------------------------5 w5 ?/ j( O3 A
Montreal 1.6% 193,190 188,016 2.8%
6 ]3 X# H+ U! _ -------------------------------------------------------------
2 b4 o( |: j) i Ottawa 4.5% 181,083 172,250 5.1%
( z9 q8 x5 l { D3 O1 s1 i- i3 K -------------------------------------------------------------, Y/ M" t* a! ]9 f8 H3 M# l2 _
Toronto 1.4% 252,088 242,918 3.8%
! k, h& |- |6 K& x -------------------------------------------------------------
; m* X" W" b% y Winnipeg 12.0% 105,648 96,008 10.0%) \4 J# h, V; e U' {' y
-------------------------------------------------------------
2 V1 d6 P, b( [2 J9 _% ~+ R Saskatchewan 9.7% 106,250 101,000 5.2%: \. } ^& I0 _+ a0 T6 D$ r
-------------------------------------------------------------4 `% r; I6 W4 m
Calgary 53.5% 245,844 153,867 59.8%: }- j# D( N- O5 K" }+ y" O" G9 x
-------------------------------------------------------------
0 D1 l- n) z) ]) B) A6 @% X Edmonton 53.1% 200,433 131,500 52.4%
3 |9 O- W. `& G: I$ H, `1 ~ -------------------------------------------------------------
* [5 S& V- H; }& D* | Vancouver 13.8% 366,250 323,250 13.3%: p7 K8 N$ w- {! z9 l! ~
-------------------------------------------------------------
% h( y J/ Y! B/ {3 E0 S Victoria 3.1% 229,000 220,000 4.1%6 Q, V' y1 B4 `0 D' k
-------------------------------------------------------------
# _# I! v# M$ E: \0 N+ t National 13.2% 211,562 185,296 14.2%
& n* E3 _* }* v( R4 A -------------------------------------------------------------! N, o( L: l1 ~1 K b: k, W: _8 x/ u& x
>>; q& ?8 L ?( Q* V! ?7 P; Z9 N& i; \
- y& O7 C9 j6 r+ U$ F Average house prices are based on an average of all sub-markets examined
: I" p" o7 V! N0 U! }) R+ j$ H! [in the area, except for the smaller markets of Charlottetown, Moncton, Saint' ~7 B+ X# C* ?& e( L$ i' G0 y0 \
John and Victoria.: @: [* }9 l# j, s6 O
9 G& F% F0 b# j- R* j* ]. J' ^
The Royal LePage Survey of Canadian House Prices is the largest, most
* b/ C& ~# f Kcomprehensive study of its kind in Canada, with information on seven types of
/ E7 o7 U/ R+ J) j# ghousing in over 250 neighbourhoods from coast to coast. This release
' T# Y$ e! }) f r% V; lreferences an abbreviated version of the survey, which highlights house price( l1 W: V$ S: d1 o3 j
trends for the three most common types of housing in Canada in 80 communities G6 o5 K L* @1 G* a( [
across the country. A complete database of past and present surveys is- X( ~- g1 M2 t) Y \
available on the Royal LePage Web site at www.royallepage.ca, and current9 H) i) A( m) ?3 _+ l7 @7 ?/ e( T
figures will be updated following the end of the third quarter. A printable
9 F% F& b9 h( d. N# K" P X7 N; n7 Eversion of the third quarter 2006 survey will be available online on
S0 K! H$ m* |/ I( K# `" YNovember 15, 2006.
3 Q4 c1 S' b6 c Housing values in the Royal LePage Survey are Royal LePage opinions of# W- B4 c7 X' W8 [9 `7 ~
fair market value in each location, based on local data and market knowledge
. S8 \( @7 L4 f0 P8 d9 {provided by Royal LePage residential real estate experts. Historical data is4 X- g5 O. @8 N2 @
available for some areas back to the early 1970s. |
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