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Average property prices in Canada up around 6% as experts predict good start to first half of 2010

The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity to new highs, according to the report from Royal LePage, which has a network of 14,000 agents across the country. It found that property prices appreciated in late 2009, with fourth quarter averages higher than in the fourth quarter of 2008.

The average price of detached bungalows rose to $315,055, up 6%, the price of a standard two storey property rose to $353,026, up 5.2%, and the price of a standard condominium rose to $205,756, up 6.4%.

Even regions that saw the strongest declines during the recession are now showing marked gains, including Toronto and the Lower Mainland, British Columbia. Vancouver, which is frequently Canada’s most expensive real estate market, experienced a particularly robust quarter, with home prices rising across all property types.
‘No other sector of the economy has been as highly affected by economic stimulus as housing. As consumer confidence has improved, Canadians have shown a lingering reluctance to acquire depreciating assets such as consumer durables, but have embraced the opportunity to invest in real property,’ said Royal LePage executive Phil Soper.

Royal LePage estimates that Vancouver’s real estate prices will rise a further 7.2% this year, although February may be soft because of the Olympic Winter Games that will be held in the city and nearby Whistler.

The analysis is consistent with other recent reports on the state of the Canadian real estate market, which has rebounded over the past 12 months after sales dried up in late 2008 and hit a low in January 2009.

The Canadian market’s sudden plunge was sparked by the credit crunch in the US but it has been much quicker to recover than its neighbour, partly due to a more stable banking industry, historically low interest rates and improving consumer confidence.

The latest report from the Greater Montreal Real Estate Board shows that the number of sales last year increased 41,802, up 3% from 2008. The median price of a single family home was $235,000 last year, up f4% from 2008.

Although sales decreased the first four months of 2009, Montreal’s real estate market rebounded and finished the year on a positive note, according to Michel Beausejour, the Montreal board’s chief executive.