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Articles Posted 7/5/2006 By Romina Maurino TORONTO (CP) - House prices in Calgary surged up by more than 50 per cent from a year ago during the second quarter, pacing double-digit percentage increases in the national average cost of a home, Royal LePage said Wednesday. Prices rose from coast to coast but activity in the West far outpaced the rest of the country, driven by soaring demand and limited inventory, the national realtor said. It’s predicting the national average house price will rise 9.2 per cent for the full year to $272,200, boosted by frantic oil-powered increases in Alberta. "In most of the country, we’re just at the end of a cycle," said Phil Soper, president and chief executive officer of Royal LePage Real Estate Services. "It’s been a five-to seven-year expansion, and it’s about time that price increases started to slow down." Meanwhile, the year-over-year price appreciation in Calgary was the largest that Royal LePage has seen since it began collecting data, Soper said. "We really have a situation in Calgary where exceptional levels of demand are chasing a limited amount of housing stock and causing prices to simply skyrocket." According to the Royal LePage tally, an average Calgary bungalow cost $371,200 in the April-June period, up 50.4 per cent from a year earlier, while a typical two-story house advanced 54.6 per cent to $397,867. A Century 21 report, also released Wednesday, observed that "energy remains the big driver of the jobs boom and most communities in the province are impacted." B.C.’s economy, meanwhile is being driven by construction for the 2010 Olympics, the natural gas fields in the Peace River region, growth in high-tech businesses and migration of retirees from other provinces. While prices appreciated in all major cities, there were substantial regional differences, as the central and eastern provinces saw slower growth. Standard two-storey house prices were up 7.6 per cent in the Atlantic region, while rising 0.9 per cent in Montreal, four per cent in Ottawa and 4.4 per cent in Toronto. By contrast, the year-over-year increase for a two-storey home was 15.3 per cent in Winnipeg, 10.7 per cent in Saskatchewan, 38.6 per cent in Edmonton, 10.4 per cent in Vancouver and 11.4 per cent in Victoria. "I would hardly characterize the Ontario market or the Quebec market as a booming market at this point," said CIBC senior economist Benjamin Tal. "Four per cent growth, in terms of price, is in line with inflation." The housing market cannot be seen in national terms but rather as the "West versus the rest," he added. Still, demand across the country remained solid due to the continued strength of the economy, low unemployment, strong consumer confidence and rising but moderate interest rates. "When interest rates rise, there is an acceleration in both the mortgage market and the housing market," Tal said. "If you see interest rates rising and you’re afraid that a year from now they will be higher, you do it now instead."
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