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Canada's housing market both vigorous and stable
" g5 i K# m9 O5 F
. S9 J3 _4 a* X$ A) d1 d- Country's market poised to show growth throughout 2006 -* S+ |. Q- i% s+ z9 A
6 E6 \! x5 z1 H( S/ T
TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market# R6 g( f% |( S1 r, [
exhibited moderate price increases and stable unit sales during the third
) x e k+ ~6 c9 B( u7 _quarter. Wide regional variances continued to be the dominant characteristic
# d( C. S- e8 E% u3 M" ~2 c, ^in the market, exemplified by frenzied levels of activity and double digit$ L$ e$ w$ S3 P1 C% C; B$ q
price gains observed in the energy and commodity rich Western provinces, and
$ J; V3 D2 I/ V; E+ o6 ]more reasonable sales volumes and moderate price appreciation in Ontario,
8 ^6 p0 n7 G7 e6 yQuebec and Atlantic Canada, according to a report released today by Royal
H8 A+ k( H) j1 f& o. B' FLePage Real Estate Services.
: U& E$ l0 E7 H; H* C) `$ [6 [$ l% }- ^# A' a( Z( P" A( l6 A
Nationally, market trends established through the first three quarters
) B+ i) v5 E3 N3 {. g7 bare forecast to continue for the remainder of the year. Robust economic
5 s7 I$ y6 M% R* |1 econditions, low unemployment rates, modestly growing salaries and wages, and
( ^2 `) w s& K) {$ }4 K/ Asound consumer confidence contributed to the overall strength of the
; K# z0 A+ {- ?* B" W+ C9 gresidential real estate sector.
0 I. ?9 A" M: D2 |# G3 u% i/ q1 Q3 t+ O: _4 K
Of the housing types surveyed, the highest average price appreciation7 J7 `( c% A$ `) C
occurred in detached bungalows, which rose to $300,365 (+16.3%)
' O4 f/ o2 F t, Ryear-over-year, followed by standard condominiums, which rose to $211,562
8 d/ G+ P+ h3 e% e(+14.2%), and standard two-storey properties, which increased to $365,380% }3 E) `$ c, R
(+13.2%).
8 u# Q2 I1 h8 T u: S1 v7 b7 Z
" |8 G" L$ y; ^# O5 s "Canada's sturdy housing market continued to demonstrate steady growth% q: N% y& ]) `8 B. p) p
during the third quarter. For all but the west, we have moved on from the
6 p- h" v) o) S9 T0 ~" T: ~$ W+ C" tfrenzied expansion that characterized the first half of this decade, and are
; Z3 @# k/ R# k2 L9 D/ g7 Xpoised to show continued growth at a more moderate pace," said Phil Soper,
; U9 f, _' O5 ^# W: h* Dpresident and chief executive officer, Royal LePage Real Estate Services. o, w+ \9 X# q& z4 L9 j
"Gone is the sellers' market that we have lived with for some years. We& B# R) T6 V: J" k+ k
welcome the more reliable conditions that are characteristic of a healthy
( i; W6 w" s7 N ~6 O$ o+ jbalanced market."
2 Q2 S: I; Z: ]1 e' l% O
$ U/ U j+ B/ S4 @4 [& | Despite the double-digit rise in average national house prices,% l7 A n; ^, l+ i
considerable regional variances were exhibited again this quarter. The shift
" p7 O( K2 v4 {( y( S9 Lto balanced market conditions, which began in late 2005, has continued& I. s ~' j" e% v- \( Y/ `, e5 l9 X% a
throughout most of the Central and Eastern regions of the country. In the core, f3 A3 U e% ?, X V2 V
energy producing western provinces, the combination of very high in-migration,
$ G. c# @/ V" Wmanageable affordability, and a shortage of inventory has driven record* e% g# P1 M% s
breaking price appreciations.
' A, C" d- G) l: b7 N U$ i/ P
4 H' c- {! U3 z0 z m, ~, ^ Echoing the second quarter and supported by Alberta's rapidly expanding6 D# d) f) @! S8 v* ?% i
economy, Calgary and Edmonton led the charge of Canadian cities with the
0 X0 b8 a- V5 y9 mlargest house price appreciation in all housing types surveyed.1 A. w3 {" }* m, ~
0 e: v5 i9 D( C V In Ottawa and Toronto, growth remained steady, supported by solid: t' l) E; D0 R4 v
economic fundamentals, an increase in available inventory and strong consumer2 [0 U- n3 m# f" r: L2 Y( Q i
confidence. While the pace of price appreciation in Ontario leveled off, t+ }$ f, j" H. S; G" [0 y
slightly, the province's real estate market remains poised for modest growth.+ b6 H$ C8 A& n+ i# e, W: i! y
In Atlantic Canada, new housing and condominium construction offered buyers( Z+ W. b* P: \6 e
greater selection at more competitive prices, resulting in a slower rate of
; F9 X# Q9 N4 H& F- Q# ]' O: R+ _price appreciation when compared with 2005.
0 z5 @( O0 V- A! r
6 v- R4 U) O! U* [ While the pace of growth in Canada has slowed, the domestic housing- ~4 {! q# B5 x/ m6 h
market is expected to outperform the American market. The economic and
7 x: {; e# M0 S6 P5 f7 Q, `financial fundamentals driving the residential real estate sector in Canada
+ h) J+ }' |( q5 z3 y b" vare markedly different than those found in the United States.' ~" I4 n& T; E$ J' f# v
- @% e( p. o p+ R; s Y) \9 K2 O Added Soper: "Canada's housing market is likely to outperform the$ C3 I+ ?8 H! j# {& L1 _
American market through 2007. A number of factors are working in Canada's2 @ g1 w4 n0 c
favour, including healthy personal and governmental debt levels, the% d) b' |: y8 A7 N% D
relatively modest rise in interest rates in our country, and general
& ]: J& m" Y' K' g5 }/ ?# {- U$ E9 _2 Saffordability in our major cities. In addition, Americans are now seeing the/ z4 E: G! s& N. o7 {1 F
downside of a tax system that encourages maximum homeowner leverage, and
# U9 x' N! l/ L0 _: g4 U- aaggressive financial products such as zero- and negative-amortization
$ ]5 F! r# W* k# }! T9 k9 n7 ?8 Vmortgages that work only in a high price growth environment."
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<<
6 ?0 \! b- V/ L" S1 d( U' h REGIONAL SUMMARIES
% Z- |4 T# h3 t# v& i >>
. M; i# ?" w+ p4 s @
- N. H5 n: c( ]' y: _ | Balanced conditions continued to characterize the housing market in
" |6 J; F* x- R5 _2 b& OHalifax, as significantly higher inventory levels helped to moderate the rate9 w* Z! ]5 @" A w& @5 s s
of price appreciation. Buyers were increasingly choosy, taking more time
$ N9 }, o! L4 k" o' W' C8 s4 elooking for newer, low-maintenance properties that were not in need of' q- o! w- e3 R
renovations.; U0 Q$ U6 i- h* l2 r2 C$ ?
, r( a( \# c7 l' J( m
The housing market in Moncton remained healthy and strong as a slight
2 q j' N8 j. Wincrease in inventory helped to moderate the rate of price appreciation
6 t3 \ P' x$ s0 J h4 Fcompared to the same period in 2005. Activity was brisk throughout August and
$ Z" Z, |! ?3 u& o4 d6 YSeptember and is expected to remain this way through the fourth quarter.
0 Q& |) u; p) c+ k( c
* m( k! Y4 ]( ?/ }9 B' b The housing market in Saint John underwent its traditional summer
! v: W G8 B. K% N+ x4 _; T! s* Cslowdown in the third quarter, with activity picking up towards the end of the
6 I8 {* P% i! Z- ]quarter. The local economy continued to thrive, as construction on a new {$ T$ u% \5 _9 u) Z/ o
600,000 square-foot shopping area has begun, bringing several new box stores
* T( z# r r" N4 V4 Qto the area. Buyers have begun seeking less expensive fixtures for their homes
$ ?5 F- y3 h: `6 c2 l$ w3 Sand are instead opting for more affordable housing options.
5 i5 M+ [' j" A
1 f; o# ]. Y; Q In Charlottetown, the housing market started to move towards balanced
: ]7 L2 k' m8 w: D5 sconditions, as some sellers had to begin to lower the asking prices on their9 Y4 n) E2 R' S( M8 e$ d
homes to make them more competitive. Activity from out-of-town and US buyers
. }' e+ M g) e6 N$ Q4 f" Y4 S$ J0 ^was down slightly compared to 2005, likely attributable to the strong Canadian Y0 ~# E7 ~" S2 I1 m, {
dollar. Inventory levels began to creep up in the third quarter, providing; l0 x+ d* D" r/ E0 H# m
buyers with more options when looking for a home.
8 t o4 Y/ ?) X+ A% f. t3 O
3 V& W, S, q5 O6 i Activity in St. John's slowed slightly in the third quarter, particularly
) P* v" a2 [/ [) B, M% C, {among higher-priced properties, where there was a slight over-supply of homes) P( W t" {/ d2 k: Y* y& A
priced over $200,000. Listing periods have increased when compared with 2005,
% y5 g* L% x% ^( H: r, g: vas some of the pent-up demand that had characterized the market over the last( c. O" \: d" A
few years has been satisfied, resulting in more normal, balanced conditions.+ d; O5 f/ f3 ] F2 |. k5 `
( ^# s* ^5 v Y- E$ ~2 k. g8 Z! v T Montreal's housing market recorded modest increases in average house" R4 C# J2 o9 ?5 y
prices, due to a slight seasonal slowdown in the third quarter as inventory
5 s4 l% U X& E9 V7 F: G( ~& h9 n% Mlevels rose. Part of this can be attributed to the fact that many renting
# \0 y" e+ ?+ y6 Qfirst-time buyers were motivated to close on the purchase of a home by July 1,
3 m! J! t, _! E: n, m2 e! swhen rental leases expire in Quebec. Once this date has passed some of the
- S$ Z4 ~' y F' q' W' {; vpressure is taken off the market, allowing buyers to visit more homes before
3 {/ [; O9 X# Omaking a purchase.
4 E4 }% A% a( e2 p7 f
% A/ P' v% j2 D( g Ottawa held its position as one of the country's most stable housing
) j+ E- c e; {) m: ymarkets in the third quarter, reinforced by a vibrant local economy and strong
+ Y$ U' k: `) w& X a! `4 ~confidence, resulting in modest increases in average house prices. The city& V0 h2 A6 q5 q0 L/ S
centre remained a bright spot in Ottawa, with homes in this area attracting
; y" Q( P. V* m: G: y6 | P# i* e$ _attention due to their convenient location and proximity to downtown
# c2 _6 ]7 d5 k4 Damenities.9 O# I* } c# }$ |$ q9 p
; ^! r( J8 m9 q3 \- Z4 N& _2 _
The housing market in Toronto sustained healthy activity levels1 t: l; D% c' E. b& K- J T
throughout the third quarter, as a strong economy helped to maintain demand" b) U- u1 i. a
across the city, causing average house prices to rise moderately. Toronto has
4 y5 f) x4 u6 z; J) w3 t# o6 _continued to experience modest growth in average house prices, and has been
% ^; l0 ] W0 U/ w7 ?! Hdriven primarily by purchasers who are buying homes as their principle" {: K* U' q4 o/ o& e
residence, rather than for investment." P% Z, r! O8 {. X. R: t
* [8 `% T" T8 a The vibrant Winnipeg housing market continued to show its strength as- c: m& ]( O' ^7 [9 J* k& a3 u
house prices rose during the third quarter. The booming local economy resulted I* Z& \5 A8 }' } \$ c8 k8 B
in a historically low unemployment rate, helping to bolster consumer
& I3 F0 L0 a' a; ~* s7 g3 w% Econfidence and Winnipeg's ranking as the city with the lowest capitalization7 l9 T4 M0 c. j, q' b* j6 ~5 ?
rate among the country's larger cities - helped to encourage buyers to enter
* }# N" q& D- @$ w) ~the market.( z) O' a; v5 l, m; h
( Z% n5 y6 h2 @1 Q, s/ A8 d' v
In Regina, the market experienced a slight seasonal slowdown through; y/ b, x' E2 l
July, as there were fewer purchasers in the market due to summer vacations. In
+ V6 x' ]* t1 `8 `+ }6 F h4 b2 EAugust, activity resumed to the busy pace previously seen in the spring( h) d6 ^5 @' Q/ x8 M/ ?
months, as the influx of purchasers made it more difficult to find a home due
/ V- g3 ~ P, k4 ~to the shortage of available inventory.3 z0 p& Y" Y* q* o# s1 R$ ?
( ]2 Q1 A6 M. @9 v$ K) | Activity in Saskatoon remained brisk as the market maintained its+ w. N1 n1 h! ^, R) z# g7 a
momentum from the busy spring sales period. The economy in Saskatoon remains9 `; Q2 G* \5 [
vibrant, as employment opportunities are abundant with many businesses
p3 D# o' |+ ?, ?/ k) b w/ xstruggling to make hires and having to recruit outside the province.7 H% m% H3 _ W8 ]
2 h5 ~/ ]# L- \
Calgary's housing market recorded blazing average house price increases# ]- t- b/ y0 M1 u
in the third quarter, in all surveyed categories. The burgeoning economy, low7 ^0 V3 U- y3 G5 p, O, L
unemployment rates and low inventory levels remained the leading factors that
/ t; w4 D# [3 y4 O; t$ J* A) qpressured Calgary's house prices upwards. However, regardless of the soaring5 e" `" c1 m7 S) _' v+ K
prices that characterized the market - even during the typically slower summer
: ~: ^; p# p7 Aseason - it is expected that activity will become slightly more balanced, as
( N+ G/ `$ M2 v& o) q" i3 Y/ ?buyers are becoming more reluctant to participate in the frenetic activity.
9 Y; \6 }" d# X& E: i# p9 Y0 J7 V+ ?$ `9 D6 C H
Edmonton's booming local economy continued to thrive in the third quarter. G9 t F5 L+ q& l
as activity in the oil sands north of the city continued to flourish. Edmonton0 V' V5 n6 |7 r& N9 W6 O
remained the hub of activity for those coming to work in the oil industry,$ f1 }- B. O* p
maintaining tight inventory levels across the city, resulting in prices
9 F/ f x; r" r/ \increasing at record levels. However, as inventory levels continued to improve
% g2 Z2 K9 J3 Q3 T" d* fin the third quarter the rate of price appreciation should moderate slightly( K" s9 [& Q: O- C# S1 x
towards the end of 2006.
! r8 A8 ^* D$ S3 j/ G3 `/ `6 P+ o' s/ h
While Vancouver has seen a slight reprieve from the severe shortage of8 F5 Y w: |5 T+ h( t2 E7 l
inventory that had previously characterized the market, supply is still unable
- p& O: A' E" v6 Xto meet demand, driving house prices upwards. Vancouver has a very diverse
6 C+ F! ^" y* z3 N6 e0 }group of active buyers - from first-time home buyers to baby-boomers to/ T- C' c# [5 ]+ e. G
foreign investors - all of whom fuel the demand for houses, placing added
: L* v9 X! v5 n4 k) G# \- t! Zpressure on tight inventory levels.4 R( }5 h- Z& [, [( F0 u! H. Z" t
; l1 T7 q$ b, D* t; U) [! ~0 Q Victoria's market is vibrant and supported by strong economic/ z( v/ E8 T. S
fundamentals, fuelled by a booming tech sector and a migration of young people
' l! \. U- U# B" F! ~9 Ginto the city that has continued to support the area's house price increases;
7 D* J2 I @. {# Q. r1 z' awhile increased inventory levels have afforded buyers more time when searching% e) h& U- S( ]4 n [4 a4 e- c
for a home, helping to normalize the market's pace.% O, D; M- H* `8 J& h1 }" }2 L
5 U6 {1 o7 |: g& s <<
5 W% L6 p% S: b* w6 }8 Z+ G" D7 T Survey of Canadian Average House Prices in the Third Quarter 2006) p6 F2 t. m) o' s; N- q
, K6 x7 k6 @& C9 z: p2 Q
-------------------------------------------------------------------------2 s8 q# K G* o1 Y
Detached Bungalows Standard Two Storey: p1 `0 Y2 X6 e8 m% [
-------------------------------------------------------------------------7 ]! e- t0 C: X7 o
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q30 J8 f7 K. o# P" ?! k
Market Average Average % Change Average Average. C# V. s5 A5 G7 Z
-------------------------------------------------------------------------. u" P. F; D+ d% c- U# x
Halifax 186,333 173,333 7.5% 198,667 199,0009 Q% u( H. t% ]$ q; ^! J2 I
-------------------------------------------------------------------------. m+ Y' {. K4 J6 x8 `5 \# C
Charlottetown 145,000 141,000 2.8% 175,000 170,0005 `- c& ]: ?( J3 {' ?
-------------------------------------------------------------------------
9 A9 ~; Y7 d4 y# g! V. \# v Moncton 135,000 127,000 6.3% 129,000 123,000
/ L$ f( ?: x" d! Q9 t -------------------------------------------------------------------------: g ^! `" f* P8 w2 f# f4 I* Y
Saint John 141,200 142,900 -1.2% - -
) n4 t H4 ~' R4 t -------------------------------------------------------------------------6 f1 `3 ~) K( M+ d! W
St. John's 143,667 142,667 0.7% 200,667 202,333! O3 c u# ~+ _: A; b2 W! @; b
-------------------------------------------------------------------------
% S l5 U/ G7 R1 } K; S- Q1 } Atlantic 150,240 145,380 3.3% 175,833 173,5836 Q4 T9 t+ Y, A
-------------------------------------------------------------------------9 h- a4 m2 g+ l) V
Montreal 213,691 203,500 5.0% 321,141 316,185
# q1 h$ i5 v$ X: n -------------------------------------------------------------------------: E2 M( N3 q' |; B! U, z
Ottawa 290,083 278,417 4.2% 285,667 273,250
9 `- H# |& y2 S" d/ G4 v -------------------------------------------------------------------------9 q$ M9 G4 F- h/ L# ?6 r
Toronto 373,368 355,882 4.9% 481,523 474,766
, g; o1 V2 S9 a* f$ _ -------------------------------------------------------------------------
( h' G; c4 d N, ]2 x$ Q" F Winnipeg 181,579 159,860 13.6% 202,337 180,707
4 }) o3 A7 i) |1 o3 g- } -------------------------------------------------------------------------! H' z+ N; U7 @* L. X3 g1 c
Saskatchewan 170,667 156,083 9.3% 182,600 166,500+ |- U- W5 b3 t8 g8 W( w
-------------------------------------------------------------------------
0 ?" z+ M% u6 e$ ^; d Calgary 395,067 252,411 56.5% 405,778 264,389
# Y2 n2 G# \2 a+ N0 V -------------------------------------------------------------------------
. z# I% H' @* R% a5 D) |, M Edmonton 286,857 194,857 47.2% 316,429 206,714; H9 E% M( m8 K o8 e
-------------------------------------------------------------------------& P( U4 ?& R% a, W
Vancouver 704,250 601,000 17.2% 794,000 697,500
2 C, b0 Z/ Q( J y* d2 N. f1 o -------------------------------------------------------------------------* e6 Y" d( S* d1 E
Victoria 375,000 348,000 7.8% 403,000 391,000
2 [% U( _- a: j; U) M' N1 t -------------------------------------------------------------------------
* v2 x$ f' t! R+ O" W t4 X National 300,365 258,202 16.3% 365,380 322,860
" q/ R! y2 P, K -------------------------------------------------------------------------
/ l, U; Q* C/ o7 x, `6 w: z6 S; T+ B* V% Z) [: s' q2 Q& v9 @
-------------------------------------------------------------
- d% b7 L' k5 C2 a( ^ Standard Condominium; ?) R3 `( {+ U- o6 a
-------------------------------------------------------------
$ \2 s( B' \/ _& A1 W 2-Storey 2006 Q3 2005 Q3 Condo
4 F; h- `& J0 s; _/ O Market % Change Average Average % Change
+ R: _0 @6 m; a5 c% l& @ -------------------------------------------------------------
) ~* Z* m6 u( X- q Halifax -0.2% 142,000 103,000 37.9%% B& k/ z! Q# X1 |" _
-------------------------------------------------------------3 [. o, e3 P& ], z# B! \5 ?4 {3 F/ K. }, o
Charlottetown 2.9% 98,000 98,000 0.0%
& n. u w; m* p8 x( g2 a -------------------------------------------------------------
4 d2 {( _4 i! t/ S. h! N Moncton 4.9% - - N/A
! g% j2 b% D l* [% w -------------------------------------------------------------
- i; ? y1 R, G' @7 ], Y Saint John N/A - - N/A
& t' D P8 |% W! F -------------------------------------------------------------0 r; G* e* a, X& Q: j
St. John's -0.8% 146,333 145,667 0.5%' e) o. B3 w D0 |% o& t& ]
-------------------------------------------------------------
6 {7 Y' C9 _; _ Atlantic 1.3% 128,778 115,556 11.4%- v7 G5 Q# }- A8 [2 X8 ^& I2 G, H& }
-------------------------------------------------------------' b# v( \: `5 N+ E ~
Montreal 1.6% 193,190 188,016 2.8%
9 p- D# m( e' }5 F1 A# `8 y -------------------------------------------------------------
* `* h) Z& O- [& i4 K Ottawa 4.5% 181,083 172,250 5.1%
+ `5 w ?- c f0 q -------------------------------------------------------------
1 S" H' K( B/ K8 P1 r/ y Toronto 1.4% 252,088 242,918 3.8%' x9 X7 v0 N5 H) w! l
-------------------------------------------------------------
- M* U8 D& x9 [, N9 Q Winnipeg 12.0% 105,648 96,008 10.0%
& H b8 R) e$ |/ G5 n -------------------------------------------------------------
* V+ o! a' R+ ~2 y0 x4 b Saskatchewan 9.7% 106,250 101,000 5.2%
: g9 x5 _. H& x$ r -------------------------------------------------------------# M( i3 D2 N% _' C
Calgary 53.5% 245,844 153,867 59.8%
' k2 b5 {1 }# Q( n- f -------------------------------------------------------------0 F- W! r! G! v! z0 F
Edmonton 53.1% 200,433 131,500 52.4%
. y: r& r% t) H* t ------------------------------------------------------------- `( _/ `7 [* ^5 R6 O7 c
Vancouver 13.8% 366,250 323,250 13.3%
: O5 n5 S9 T$ e' N2 t. O -------------------------------------------------------------' m) _& @; S z/ k, y0 M
Victoria 3.1% 229,000 220,000 4.1%
% d3 a5 [& Q4 H$ O- ]" h+ h+ W -------------------------------------------------------------, b$ c, K2 u) ~' K+ O' e7 F# |
National 13.2% 211,562 185,296 14.2%
1 A" ]' W) ^. Y+ `' [ -------------------------------------------------------------$ V* y' U6 H: p1 A
>>4 k$ m6 N+ ]# k q5 }$ }! M/ b
: ~, q) v1 L: _+ W) J0 N$ v Average house prices are based on an average of all sub-markets examined
+ n! x6 T+ s$ y+ ?) k2 z6 }in the area, except for the smaller markets of Charlottetown, Moncton, Saint
8 V7 `7 z" U# D% LJohn and Victoria.9 L% Y% I. D' d( _" _& z+ n" D
. k2 F6 u8 C4 @! F. j7 M The Royal LePage Survey of Canadian House Prices is the largest, most
0 d9 ^1 i* [; S2 _/ Zcomprehensive study of its kind in Canada, with information on seven types of/ o. Z8 N6 N& @) B# ^- `! w; {; V
housing in over 250 neighbourhoods from coast to coast. This release8 o" H: r# i: G+ ]: o- `
references an abbreviated version of the survey, which highlights house price
; r/ p0 T, D A' V& C5 A3 |+ qtrends for the three most common types of housing in Canada in 80 communities
/ S0 C; _# k8 z/ uacross the country. A complete database of past and present surveys is
! k: Q5 m# ?* U- D% H* z- V# uavailable on the Royal LePage Web site at www.royallepage.ca, and current8 j7 |( I* k0 |- \4 x- n3 ~5 g
figures will be updated following the end of the third quarter. A printable; o* T% M8 M& m4 M7 s% P
version of the third quarter 2006 survey will be available online on- u- A) n+ Q9 v( v4 P* n
November 15, 2006.
* M9 S" Y: }: }! B2 C Housing values in the Royal LePage Survey are Royal LePage opinions of
! u, X0 `9 ^; D$ o( xfair market value in each location, based on local data and market knowledge
& v$ ^" J' G- G& Hprovided by Royal LePage residential real estate experts. Historical data is
! g+ ^. ~3 ~* g& o; U- X- }available for some areas back to the early 1970s. |
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