Real estate boosted by stronger labour market

The stronger Canadian jobs market have given a boost to the real estate sector, according to the latest market survey from Royal LePage.

The brokerage network says that sales volume and price increases suggest that 2015 could be a record breaking year.

The average price of a home in Canada rose between 3.9 per cent and 7.5 per cent year over year in the second quarter, with detached bungalows gaining the most nationally, rising 7.5 per cent year over year to $438,938, while standard two-storey homes appreciated 6.8 per cent to $471,002.

During the same period, the average price of a condominium rose 3.9 per cent to $268,583.

Royal LePage forecasts that the average price of a home in Canada will increase 6.1 per cent for the full year when compared to 2014.

“The robust national average home price increases that we have seen in the second quarter are heavily influenced by activity levels in Toronto and Vancouver,” said Phil Soper, president and chief executive officer, Royal LePage.

“The housing industry in both cities boasts a foundation of prosperous labour markets driving demand for housing that is in limited supply – above average price increases aren’t going away any time soon.”

He warned that if the Bank of Canada cuts interest rates it could lead to overheating in those markets.

The report says that increased consumer confidence drives sales and that the strong labour markets boosts that confidence even in the face of lower oil prices and economic uncertainty. 

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