City residential sales totaled 23,489 during 2013, and prices for the year were up by 8.6 per cent over 2012. The single family benchmark price was $472,200 in December, a 0.3 per cent increase over the previous month and an 8.6 per cent increase over the previous year. On an annual basis, unadjusted single family prices grew by more than seven per cent in 2013, exceeding previous highs.
Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth.
As expected, both new listings and transactions in December eased over the previous months because it is typically a slower time of the year for sales. However, sales activity for the month was in line with long-term averages.
Typically, fewer sellers list their homes in December. There were more new listings this year than in 2012 because some sellers saw the continued price gains and decided it was the right time to list. Market conditions favoured the seller for much of 2013, causing price gains in both the single-family and condominium sectors in the city.
Prices have recovered in the single-family market, but sellers need to keep in mind there are differences between communities and types of homes. Higher-end homes (priced above $500,000) have recorded slower price growth than those in the lower-price segment. And there are many communities where prices have not surpassed previous highs.
The condominium market is more affordable than single family, and that is attractive to first-time buyers who are weighing rising rental costs against ownership costs. Investors are also attracted to condos, because prices have not yet fully recovered to their previous highs.
In 2014, both sales activity and prices are expected to improve, but not at the same pace recorded this year. While factors influencing demand will support growth in 2014, rising listings and increased competition from the new home sector should alleviate some of the supply pressure in the market.
Those factors, combined with potential increases in long-term lending rates, should take some of the steam off the exceptionally strong price growth recorded in 2013.