After slump in November, home prices to rise next year

Oversupply expected to tighten in February

EDMONTON - Edmonton home prices will recover in the first half of 2008 from their late-2007 slide, says the Royal LePage Market

Survey Forecast, released Monday.

The average residential sale price is expected to rise only one per cent to $341,000 in 2008 from the projected 2007 average of $337,500. But November prices averaged only $325,060 according to the Realtors Association of Edmonton so the forecast actually is 4.9 per cent above those recent levels.

Ken Shearer, broker/owner of Royal LePage Noralta Real Estate Inc., predicts that the current oversupply of listed homes will start to tighten in February as more properties are sold and others are pulled off the market.

Demand will remain strong with in-migration, low unemployment and low interest rates, Royal LePage predicts.

"The move by the Bank of Canada to reduce its overnight target-lending rate by a quarter of a per cent in 2007 will bode well for first-time buyers," it notes.

Additionally, "the Canadian dollar hovering at parity will continue to bolster the country's high consumer confidence and is anticipated to translate into continued growth in consumer spending," Royal LePage predicts.

"The negative impact of the high dollar on the country's manufacturing sector for export trade will be felt mostly in southern Ontario and Quebec."

The second quarter of 2008 with more balanced supply and demand plus a predictable seasonal surge should bring most of the year's price rise, Shearer says.

Edmonton's one-per-cent price increase from 2007 to 2008 is expected to be the lowest among major Canadian cities, with other Royal LePage forecasts ranging from 3.5 per cent in Toronto and Montreal to 15.4 per cent in Regina.

From 2006 to 2007, Edmonton led the country with a 34.5-per-cent average home price increase.

The number of home sales is expected to fall in 2008 across most of Canada. Royal LePage forecasts a national decline of four per cent, to 500,927 units. Edmonton unit sales are expected to fall 6.5 per cent -- which is more than any other major city -- to 18,950 units.

Edmonton Journal - Tuesday, December 18, 2007 - Ron Chalmers