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The average price of a home in Canada increased between 1.2% and 3.8% in the fourth quarter of 2013, according to the Royal LePage House Price Survey and Market Survey Forecast.

Read: U.S. home prices up slightly

The survey showed year-over-year average price increases in the fourth quarter of 2013 of 3.6% to $418,282 for standard two-storey homes and 3.8% to $380,710 for detached bungalows, while the average price of a standard condominium rose 1.2% to $246,530.

Prices are expected to maintain healthy momentum into 2014, with Royal LePage projecting a 3.7% increase nationally from 2013 and a shift to a seller’s market in the first portion of the year.

“A few short months ago, the country’s housing market emerged from a year-long correctional cycle of dramatically slowed sales volumes. Later 2013 was marked by a transition to buoyant sales volumes and above average price growth,” said Phil Soper, president and chief executive of Royal LePage.

“In the absence of some calamitous event or material increase in mortgage financing costs, we expect this positive momentum to characterize 2014. In fact, we expect a market tipped decidedly in favour of sellers for the first half of the year, after which we project a shift to a more balanced market.

“We predict continued upward pressure on home prices as we move towards the all-important spring market. In addition to normal demand, housing prices in Canada this year will be influenced by buyers who put off purchase plans in the very soft spring of 2013,” continued Soper.

“Talk of a ‘soft landing’ for Canada’s real estate market in the new year is misguided.  We expect no landing, no slowdown, and no correction in the near-term. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”

Canada’s economy is expected to perk up in the year ahead, supported by increased business spending, improving employment and wage prospects, and a pick-up in exports propelled by a recovering U.S. economy and a lower Canadian dollar, among other factors.

“We believe aggressive government intervention, such as further restrictions on first-time buyer’s access to insured mortgage financing, or significant increases in interest rates, is unlikely to occur in 2014,” said Soper. “Our forecast assumes a continuously improving economy, both at home and abroad.”

Regional Markets

Despite a swelling of inventory at year’s end, the Halifax housing market made strong gains in 2013. Standard two-storey homes saw the largest year-over-year gain, with the average price increasing 4.8% to $329,633. At the same time, condominiums increased 2.9% and detached bungalows increased 2.4%. Average Halifax house prices are forecast to increase by 1.1% in 2014.

St. John’s housing prices shot up again in the fourth quarter, with all three housing types experiencing 9.0% or greater year-over-year growth. An increase in the supply of homes available for sale in that market point to more moderate price appreciation in 2014.

The price for standard two-storey homes in Montreal increased markedly in the fourth quarter, increasing by 5.8% to $401,714. Other housing categories were more balanced, with detached bungalows rising by 2.9% and standard condominiums declining a modest 0.4%.  Average housing prices in Montreal are forecast to increase by 1.4% in 2014, partially because of an expected decline in unit sales.

Prices for detached homes in Ottawa increased slightly on a year-over-year basis, with the average price for standard two-storey homes increasing 2.2% to $397,667 and detached bungalows increasing 2.4% to $395,167.  Condominiums saw a slight depreciation in prices in reaction to a surge in available units. Average home prices in this region are expected to see mild growth of 1.6% in 2014.

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