Royal LePage’s house price survey and market survey forecast showcases the average price of a home in Canada, which increased in the fourth quarter of 2012 to between two and four per cent. The survey notes, however, that compared to 2012, fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices are rising. By the end of 2013, Royal LePage expects the average national home price to be one per cent higher than in 2012.

While home sales volumes slowed down in the second half of 2012, house prices held firm. Some consumers delayed entry into the market during 2012, faced with economic uncertainty as both U.S and European governments struggled with debt management plans. In the fourth quarter, standard two-storey homes rose four per cent year-over-year to $390,444, while detached bungalows increased 3.6 per cent to $356,790.

“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however, house prices proved resilient,” says Phil Soper, president and CEO of Royal LePage. “Our sturdy domestic economy and encouraging employment trends have emboldened sellers, and some have opted to let market conditions adjust before listing. Simply put, fewer home owners listed their properties in the second half of the year, which kept inventory levels lower and supported home values.”

Soper notes that in the absence of a serious economic event, Canadians will adjust their short-term buying or selling timing according to market conditions but that it is rare for engaged, qualified families to hold our for long. Buyers are more likely to make purchasing decisions based on trigger events such as marriages, growing families, salary or wage increases, or the need to relocate for a new job.

Royal LePage expects the trend towards slower sales volumes seen in the second half of 2012 will continue through the first half of 2013. Expectations are that year-over-year comparisons will begin to show improvement in the third quarter 2013, with sales volumes that are relatively flat versus 2012, and return to growth in the final quarter of the year.

“Canada is a realm of sizable, fairly independent regional economies. Some housing markets such as those in Alberta and Saskatchewan, are poised to expand significantly in 2013,” says Soper. “We will see a decline in unit sales and a flattening of home prices in our largest urban markets of Vancouver and Toronto, and that will have a significant dampening effect of reported national averages.”