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Canada's housing market both vigorous and stable
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- Country's market poised to show growth throughout 2006 -
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8 Z2 y$ K# C* ]+ b TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
# b0 d9 M) o% H! r# Cexhibited moderate price increases and stable unit sales during the third/ r1 |6 w0 ?- q) E
quarter. Wide regional variances continued to be the dominant characteristic
4 z9 C$ a& n$ I$ q$ Jin the market, exemplified by frenzied levels of activity and double digit% L8 q* [, H. u$ L7 A; u
price gains observed in the energy and commodity rich Western provinces, and
% \1 K- A6 Y6 x" w& umore reasonable sales volumes and moderate price appreciation in Ontario,
) z( p1 [. y* O4 vQuebec and Atlantic Canada, according to a report released today by Royal
% W. u) I# N; T. t' PLePage Real Estate Services.0 p$ S% ]% E) z n3 c( v
3 V- a: u; U& t" a4 {9 g/ j, N
Nationally, market trends established through the first three quarters4 B( Q0 D+ d6 H9 e
are forecast to continue for the remainder of the year. Robust economic; C$ H5 Y; f. [& w) d: M6 w
conditions, low unemployment rates, modestly growing salaries and wages, and7 Q" h# s7 R6 n
sound consumer confidence contributed to the overall strength of the: Q% m* k3 v5 H, e
residential real estate sector.
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/ }/ a! R1 o, [: C3 ? Of the housing types surveyed, the highest average price appreciation8 k% Q# X) X5 [8 }9 B( f" X
occurred in detached bungalows, which rose to $300,365 (+16.3%)
& X7 w( k1 m% ~3 kyear-over-year, followed by standard condominiums, which rose to $211,562
0 l4 ]) \; N. _(+14.2%), and standard two-storey properties, which increased to $365,380
' n8 `' v% k W3 `# t8 D(+13.2%)./ o+ u/ W" ?2 M4 n& T0 O
9 T* O, B2 u0 S( ^; `. N "Canada's sturdy housing market continued to demonstrate steady growth
. V p7 o' U# `* |during the third quarter. For all but the west, we have moved on from the' E/ Z: t+ _ ?% R
frenzied expansion that characterized the first half of this decade, and are; @$ L. |" F$ k: `# z
poised to show continued growth at a more moderate pace," said Phil Soper,& r, C+ L# o, A1 f0 w4 z
president and chief executive officer, Royal LePage Real Estate Services.3 h/ _5 e% R" u( M& c- {
"Gone is the sellers' market that we have lived with for some years. We
, f9 m8 w4 _- |% ]welcome the more reliable conditions that are characteristic of a healthy, [2 `; N4 k! y) ~' i1 t
balanced market."# h K5 M# M( N7 p$ b& J
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Despite the double-digit rise in average national house prices,: E0 Z/ V2 H2 J2 U
considerable regional variances were exhibited again this quarter. The shift- R# W/ ]* N1 Q$ U
to balanced market conditions, which began in late 2005, has continued7 N9 }3 J9 r& m6 e4 F2 n
throughout most of the Central and Eastern regions of the country. In the core
1 a H" E l/ \' B; |% q# Xenergy producing western provinces, the combination of very high in-migration,# l# ?( c9 L9 J1 u5 q. m9 u Z
manageable affordability, and a shortage of inventory has driven record
; I# J" Q( A6 l5 M, o) Tbreaking price appreciations.- k/ u0 Z$ u3 n
; I W, K4 M( N& q Echoing the second quarter and supported by Alberta's rapidly expanding
4 V i# ^2 k# q! h! leconomy, Calgary and Edmonton led the charge of Canadian cities with the+ I% l3 _) A4 L5 @
largest house price appreciation in all housing types surveyed.$ t1 i" n& x/ N! @1 o
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In Ottawa and Toronto, growth remained steady, supported by solid
) v! ^% A5 U8 Y( F2 Geconomic fundamentals, an increase in available inventory and strong consumer) j. N" L7 Q% R+ B8 G. c5 J5 G
confidence. While the pace of price appreciation in Ontario leveled off
4 q8 i, a& N. Vslightly, the province's real estate market remains poised for modest growth.
7 o/ `$ i J; _- l& J' A8 }3 ^1 E8 UIn Atlantic Canada, new housing and condominium construction offered buyers+ p4 M2 o0 S }' W+ D( z
greater selection at more competitive prices, resulting in a slower rate of7 S" E* F _* R2 H5 O5 q
price appreciation when compared with 2005.
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While the pace of growth in Canada has slowed, the domestic housing) i+ A& m( O+ ^1 _& M
market is expected to outperform the American market. The economic and+ l7 T4 V+ x# Y7 K% }4 _
financial fundamentals driving the residential real estate sector in Canada
# F, s- n* A# care markedly different than those found in the United States.
2 i* e0 t. {( |0 u
1 e) m1 G4 w2 N+ G Added Soper: "Canada's housing market is likely to outperform the/ |: e. k5 g z7 Q9 X" J
American market through 2007. A number of factors are working in Canada's
8 ?* f. T4 i& I( Y% k6 T2 y- x7 n% Ffavour, including healthy personal and governmental debt levels, the
( W$ ]/ x' j* ^* |$ \relatively modest rise in interest rates in our country, and general/ X2 U2 N, ]2 X
affordability in our major cities. In addition, Americans are now seeing the+ c+ |! O/ a* a( t+ \
downside of a tax system that encourages maximum homeowner leverage, and7 }, E# d, F$ c/ y! ?6 I
aggressive financial products such as zero- and negative-amortization
8 I; Z$ x8 J) emortgages that work only in a high price growth environment."
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REGIONAL SUMMARIES
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; b0 Y+ R$ z& O1 t/ {! q+ d; _/ @5 E Balanced conditions continued to characterize the housing market in
) M. U% l9 v8 ^Halifax, as significantly higher inventory levels helped to moderate the rate
1 M" V6 c6 n- S5 |4 Fof price appreciation. Buyers were increasingly choosy, taking more time
" K* j3 I# a% g+ w$ }looking for newer, low-maintenance properties that were not in need of! ~* V2 Z0 ]9 a/ s" z+ J2 g, w* Z
renovations.
+ V/ J3 ?/ a$ w7 U
% Y* d! n/ X4 H( _3 B The housing market in Moncton remained healthy and strong as a slight; c2 ~' A4 }. |& G. i- B' n8 w
increase in inventory helped to moderate the rate of price appreciation
. {6 x( E3 B& {9 R% Bcompared to the same period in 2005. Activity was brisk throughout August and8 x& V; P) {! q0 k
September and is expected to remain this way through the fourth quarter.
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$ G0 I0 u* F( } The housing market in Saint John underwent its traditional summer
6 Y( H% ~* S0 \6 w& ^, ?slowdown in the third quarter, with activity picking up towards the end of the/ Q! F+ M3 p2 r4 q: v) J" W( q
quarter. The local economy continued to thrive, as construction on a new
8 d0 {. g8 c- @, S+ ?600,000 square-foot shopping area has begun, bringing several new box stores
+ b4 ~4 e* `4 Dto the area. Buyers have begun seeking less expensive fixtures for their homes
C' Y; e+ t* J2 E# u; q- Vand are instead opting for more affordable housing options." t: _3 Q9 q( f
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In Charlottetown, the housing market started to move towards balanced) Z5 ^* F9 L! M
conditions, as some sellers had to begin to lower the asking prices on their2 u8 o/ C- w0 {% _$ F! `3 t+ d4 C4 C ]
homes to make them more competitive. Activity from out-of-town and US buyers# }! C/ H" f! J! d' O
was down slightly compared to 2005, likely attributable to the strong Canadian
; F. j! c2 f! Q, ldollar. Inventory levels began to creep up in the third quarter, providing
' |, O& Q8 I9 E9 G6 G% d6 Pbuyers with more options when looking for a home.# k: d& i+ V$ _: y( s
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Activity in St. John's slowed slightly in the third quarter, particularly
+ O: @) G& R) W) I- Zamong higher-priced properties, where there was a slight over-supply of homes! D) _8 L3 _/ R U9 i, q
priced over $200,000. Listing periods have increased when compared with 2005,
; c( y J0 v( J3 W3 b3 ~% Q6 Aas some of the pent-up demand that had characterized the market over the last# \+ K, _& ?# w! p4 b
few years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house
3 p2 e9 H# P' E vprices, due to a slight seasonal slowdown in the third quarter as inventory
, Z$ _! M9 u7 w. N# y# Blevels rose. Part of this can be attributed to the fact that many renting
. S( L! r$ J2 C; o; J! I6 Q! D8 qfirst-time buyers were motivated to close on the purchase of a home by July 1,
9 P& M7 L$ P( g. Pwhen rental leases expire in Quebec. Once this date has passed some of the
- B. e, r9 ^. n2 t( n1 H1 mpressure is taken off the market, allowing buyers to visit more homes before
* ]. _1 |- i& X, Smaking a purchase.9 ]) S6 q0 E5 m9 J( f- B
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Ottawa held its position as one of the country's most stable housing
. N/ V. V- A/ _; r) ]8 rmarkets in the third quarter, reinforced by a vibrant local economy and strong% m/ L9 A M7 R3 V; i) f( |8 P
confidence, resulting in modest increases in average house prices. The city+ M0 g" D% ]( y9 d% o$ N Z
centre remained a bright spot in Ottawa, with homes in this area attracting5 f( `* T) k4 N! z( Q) p, F |
attention due to their convenient location and proximity to downtown/ y2 X9 v! e2 B* n5 w) J
amenities.
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The housing market in Toronto sustained healthy activity levels, k+ p: R" _1 _+ p; ~' \
throughout the third quarter, as a strong economy helped to maintain demand
2 Y" H: n3 c. L. S1 Kacross the city, causing average house prices to rise moderately. Toronto has8 Q8 X' \& ~; t4 |0 Q
continued to experience modest growth in average house prices, and has been
. v. P. M0 [& w# s2 h* ^$ ]driven primarily by purchasers who are buying homes as their principle+ H- S1 |& w" r( X( W D- t& x
residence, rather than for investment.5 ~" q4 T4 H, i
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The vibrant Winnipeg housing market continued to show its strength as
) o' I6 f& k- j7 Yhouse prices rose during the third quarter. The booming local economy resulted
( W# E( B+ V6 s$ `1 s, v$ Kin a historically low unemployment rate, helping to bolster consumer
0 x# Q& Z: i1 r7 O Kconfidence and Winnipeg's ranking as the city with the lowest capitalization
' Z2 [6 n6 O5 D* w* r, r' R( `rate among the country's larger cities - helped to encourage buyers to enter
. X1 L% ^( [; i K/ f! hthe market.
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In Regina, the market experienced a slight seasonal slowdown through* V1 y# Y0 @; t! |9 s+ V% y' R
July, as there were fewer purchasers in the market due to summer vacations. In
( B3 q+ g% Y% E& J1 MAugust, activity resumed to the busy pace previously seen in the spring( M# D6 \! _& W# h' {3 j) H- N. _5 s
months, as the influx of purchasers made it more difficult to find a home due
4 v' l1 f1 O. | h1 K" ]to the shortage of available inventory.* ]3 R. \7 z+ Q) M# B
2 U2 }0 A' A4 G8 P4 N Activity in Saskatoon remained brisk as the market maintained its
4 X) p w& o1 m* P# }momentum from the busy spring sales period. The economy in Saskatoon remains4 _2 c5 f* Y7 R0 F
vibrant, as employment opportunities are abundant with many businesses
: P0 L7 C: e) V& Y# r% }/ L' lstruggling to make hires and having to recruit outside the province.
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: Q: `% u. G1 i Calgary's housing market recorded blazing average house price increases! R& T2 j* ^: C. A
in the third quarter, in all surveyed categories. The burgeoning economy, low
+ {( c7 i( `" W+ C! v$ z" l8 Iunemployment rates and low inventory levels remained the leading factors that
1 Y" Z9 j; k4 u6 y! Vpressured Calgary's house prices upwards. However, regardless of the soaring1 H' b0 E) N1 p9 X8 G. W6 m
prices that characterized the market - even during the typically slower summer
8 M k1 K/ z+ a9 F8 P2 D* rseason - it is expected that activity will become slightly more balanced, as
) n( V( L# R/ U) j- ]+ J7 c. dbuyers are becoming more reluctant to participate in the frenetic activity.
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) v9 v" Z7 H; u- I* Z* t; N7 [ Edmonton's booming local economy continued to thrive in the third quarter
& J- u# K0 J7 l! J0 `# d1 y% ]as activity in the oil sands north of the city continued to flourish. Edmonton& z, \$ ~: G2 V- ]0 K$ G' ~" F
remained the hub of activity for those coming to work in the oil industry,
* C3 Z: ^) G d) u9 e8 smaintaining tight inventory levels across the city, resulting in prices
3 p( j4 \& N! {0 V0 q# ]increasing at record levels. However, as inventory levels continued to improve' u0 i0 K# \0 t, h4 y6 L9 N/ F' t* f4 P
in the third quarter the rate of price appreciation should moderate slightly
6 F' B* R- z9 n$ }$ R+ Etowards the end of 2006. 0 ~0 Y* H+ g7 h# k* b' c9 d
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While Vancouver has seen a slight reprieve from the severe shortage of
$ P+ Y' g7 z) [3 ]+ \, finventory that had previously characterized the market, supply is still unable
' W; J+ e$ t; {( M: B( Rto meet demand, driving house prices upwards. Vancouver has a very diverse7 R \& |; K- }; z- ^3 E/ h. b* a
group of active buyers - from first-time home buyers to baby-boomers to
& F4 [2 C3 K$ Q6 P eforeign investors - all of whom fuel the demand for houses, placing added
) u, J* K5 e7 Y- o8 tpressure on tight inventory levels.
' [2 i, Z/ r! y0 B; z1 W
2 r) Q b+ l& I4 ? Victoria's market is vibrant and supported by strong economic
6 \! I. B* V7 ]2 B% Nfundamentals, fuelled by a booming tech sector and a migration of young people$ K. N9 O" ?+ V8 k! A
into the city that has continued to support the area's house price increases;9 L% W7 R i+ w4 x
while increased inventory levels have afforded buyers more time when searching) n* X7 m* Q0 k+ l7 q5 h& a. ~
for a home, helping to normalize the market's pace.
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<<; j4 C8 E8 d3 ]
Survey of Canadian Average House Prices in the Third Quarter 20061 p2 B1 u0 B X, O
' ?% L! F$ c( i5 w" q: x, y -------------------------------------------------------------------------6 K8 R% S6 [. _
Detached Bungalows Standard Two Storey
+ G, p5 @, Y* V -------------------------------------------------------------------------
: U+ q3 v* n/ B4 c1 u7 ]$ ?3 A9 ` 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3' _$ `) N$ `5 ?/ u& b5 i
Market Average Average % Change Average Average& ~" G% q9 c- b/ ~$ ]
-------------------------------------------------------------------------% D5 n* ~ ?6 B0 F" g& _
Halifax 186,333 173,333 7.5% 198,667 199,0001 r# J; L- c7 ]
-------------------------------------------------------------------------
7 Q3 k7 S3 @$ L. @. ], ]0 R Charlottetown 145,000 141,000 2.8% 175,000 170,000
( u# W( j9 A. n! c3 [5 o -------------------------------------------------------------------------- p- D7 A5 D1 E1 a& K: K+ y
Moncton 135,000 127,000 6.3% 129,000 123,000
& u, T6 W0 F4 }4 `3 M+ w -------------------------------------------------------------------------4 D4 _' B9 t8 m" r! s# h7 s2 p
Saint John 141,200 142,900 -1.2% - -
* d5 l5 E: Z. E0 L+ t -------------------------------------------------------------------------9 n' R: U! P2 M: Q
St. John's 143,667 142,667 0.7% 200,667 202,333
7 K! B9 U; _. P1 l) W# W -------------------------------------------------------------------------9 l: ~* h9 N3 t$ ~7 E9 d q/ C
Atlantic 150,240 145,380 3.3% 175,833 173,583/ E5 I( }. F4 k1 A+ F
-------------------------------------------------------------------------1 Q; j6 Y* w! T
Montreal 213,691 203,500 5.0% 321,141 316,1858 l! a: S2 `4 o: s4 C1 m& q; R) L/ b
-------------------------------------------------------------------------
. L2 J0 S( I( \, X+ A3 @4 K/ s Ottawa 290,083 278,417 4.2% 285,667 273,250* j' f3 _/ B, \8 W
-------------------------------------------------------------------------
6 Z# p* |- b+ o Toronto 373,368 355,882 4.9% 481,523 474,7660 {6 p! Y! f f1 {; I% L9 X3 L
-------------------------------------------------------------------------
' E+ b. B& c3 D/ V! i Winnipeg 181,579 159,860 13.6% 202,337 180,707) O1 M$ V- a% i& J/ E- S) X
-------------------------------------------------------------------------
7 R+ M; n: t7 B6 X! n2 | Saskatchewan 170,667 156,083 9.3% 182,600 166,5004 A6 w; A$ q0 n6 i z& o
-------------------------------------------------------------------------: A; d' K* ^+ P: H# V0 Z. _
Calgary 395,067 252,411 56.5% 405,778 264,389
`# ?# O* [9 Q -------------------------------------------------------------------------
; _6 J* P; G) Q$ l7 q Edmonton 286,857 194,857 47.2% 316,429 206,714
# Z9 T) p( X" W' Z -------------------------------------------------------------------------
) F7 e/ o1 R* s. ?' { Vancouver 704,250 601,000 17.2% 794,000 697,500
9 P+ g. P1 p: q -------------------------------------------------------------------------
- q" m( o4 ]4 y Victoria 375,000 348,000 7.8% 403,000 391,000
% B* _0 ?5 F7 S; v7 h5 l -------------------------------------------------------------------------
0 \3 @6 u* ?( { C5 x National 300,365 258,202 16.3% 365,380 322,860
+ b/ l% B, t3 W, b4 U6 r/ y; C -------------------------------------------------------------------------$ K9 h, |) }! D
0 I$ \6 I0 h' H% x0 z" j -------------------------------------------------------------
1 s1 U0 E# @, a" P Standard Condominium) J) K5 O8 g8 Y% m9 u: n1 \& ~
-------------------------------------------------------------# `; `: O- p+ S8 |: M
2-Storey 2006 Q3 2005 Q3 Condo7 g3 [$ Q3 W8 r2 F' d( l, v; B
Market % Change Average Average % Change
6 X; m9 l, ?; T9 g -------------------------------------------------------------
) [) p) @' i. { Halifax -0.2% 142,000 103,000 37.9%
! i* @/ m8 W: g; j/ {# R -------------------------------------------------------------
0 u% D+ z$ ?( w5 M2 N Charlottetown 2.9% 98,000 98,000 0.0%
# {/ Y+ K6 u1 m3 M: w# H% ?6 G: a -------------------------------------------------------------8 V4 _0 F C8 M& f5 J# m
Moncton 4.9% - - N/A3 s9 a$ _0 \/ c4 ?& W, R, z
-------------------------------------------------------------
) h2 y0 @: P) Q3 [# ~: E& q J/ J Saint John N/A - - N/A
( Z. w( M6 ^5 O6 Y -------------------------------------------------------------
, r. F4 d& ~% w& M6 p St. John's -0.8% 146,333 145,667 0.5%5 H. C5 }# J! x. }) `
-------------------------------------------------------------
% m/ f! l6 ?; [) _ Atlantic 1.3% 128,778 115,556 11.4%
T$ h; |9 j, I -------------------------------------------------------------7 D T& Z" A3 h% x+ w
Montreal 1.6% 193,190 188,016 2.8%4 Q$ d4 {* D; C6 K5 [0 z5 B
-------------------------------------------------------------
* A8 X' X3 ~3 E, y1 l" u Ottawa 4.5% 181,083 172,250 5.1%# Y" X; \% p' v6 K
-------------------------------------------------------------2 V6 @; _- F- r
Toronto 1.4% 252,088 242,918 3.8%& A; u Y6 F/ V- c9 w5 i, Q
-------------------------------------------------------------
8 y! [0 x# U, b! E% u& v- B E9 { Winnipeg 12.0% 105,648 96,008 10.0%0 H5 B- B8 t. U
-------------------------------------------------------------! u& X: H6 j3 ?: c
Saskatchewan 9.7% 106,250 101,000 5.2% ?. e% p* `! F+ R) z$ S9 n$ D
-------------------------------------------------------------
" l8 l, i l8 r7 I2 K- B! g8 s$ ?/ d Calgary 53.5% 245,844 153,867 59.8%: y' o }9 ~( X2 E
-------------------------------------------------------------
" P* K# y. q! @1 H9 B5 W2 s6 ` Edmonton 53.1% 200,433 131,500 52.4%3 n2 M- s+ E* J$ ~2 O9 }8 ~, z
-------------------------------------------------------------
) ] z) v1 M' o6 v1 A, H2 l& r8 _ Vancouver 13.8% 366,250 323,250 13.3%% p% E0 X; p* @5 q
-------------------------------------------------------------7 L$ k2 x1 K; q; \5 i
Victoria 3.1% 229,000 220,000 4.1%* m8 V6 [. t) S) w3 P
-------------------------------------------------------------( l0 Z3 \. g/ e" E7 l& w7 s; j
National 13.2% 211,562 185,296 14.2%
% d; U/ w: w" o; U& C5 F& q -------------------------------------------------------------& F! a r! Z! W' J* O: g) p
>>; }0 s0 q8 A) z6 a
4 \, O6 W4 }2 x
Average house prices are based on an average of all sub-markets examined: K z; q6 V0 N8 D
in the area, except for the smaller markets of Charlottetown, Moncton, Saint5 i6 H4 v' N. Z- J H( a" Z+ H
John and Victoria.4 ^' U! I, j; b% g0 D' @' N; M
) w, S4 Y* F# g! [9 I: f6 z7 U0 z The Royal LePage Survey of Canadian House Prices is the largest, most, W' A. y( B% O4 |7 x" I9 B
comprehensive study of its kind in Canada, with information on seven types of
" G% F3 P# ~9 o7 Chousing in over 250 neighbourhoods from coast to coast. This release, w- ?) |- f: c+ f9 e" A
references an abbreviated version of the survey, which highlights house price$ L/ j2 E4 ~3 M2 P
trends for the three most common types of housing in Canada in 80 communities! g; X/ T6 \9 S' K- X, m P5 @* M4 B
across the country. A complete database of past and present surveys is
/ ]- r {. r6 f1 iavailable on the Royal LePage Web site at www.royallepage.ca, and current) t( b* m& m! o$ b: f) n
figures will be updated following the end of the third quarter. A printable
3 _1 o* Q. @+ i% |9 J) o2 sversion of the third quarter 2006 survey will be available online on6 p. M2 \+ e6 p5 c# u
November 15, 2006.
3 _* ]. Z- c( O9 D( q. {* t1 H Housing values in the Royal LePage Survey are Royal LePage opinions of" _7 E+ L5 ]1 W" ^) S7 p" {* g+ w
fair market value in each location, based on local data and market knowledge
0 ]- w7 }+ l! w: p: uprovided by Royal LePage residential real estate experts. Historical data is( N( @# Z, S- E. R$ a7 {* U0 R
available for some areas back to the early 1970s. |
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