Across Canada, the average home price increased between 3.9 and 4.6 per cent in 2010s fourth quarter compared to 2009. Home values are expected to rise steadily through 2011 as low borrowing costs prompt more sales activity to occur in the first half of the year, according to the Royal LePage House Price Survey and Market Survey Forecast.

It is widely believed mortgage rates will rise in the second half of 2011. Trends in the housing market continue to be driven by the lingering after-effects of the recession, said Phil Soper, president and chief executive of Royal LePage Real Estate Services, in a press release. Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels. We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs.

Highlights from some key markets were as follows:

* St. John’s, Newfoundland experienced strong year-over-year gains in all three housing types: detached bungalows, standard two-storey and standard condominium

* Montreal saw an 8.7 per cent year-over-year increase in detached bungalows and two-story homes, while condos jumped 11.3 per cent

* Ottawa’s housing prices rose between 6.3 and 10 per cent in all categories

* Toronto’s largest increase of 5.6 per cent came in for two-storey houses; but prices are expected to rise by only one per cent in 2011

* All housing categories in Winnipeg had strong increases with detached bungalows rising the most at 10.3 per cent

* Average home prices in Regina are predicted to increase by five per cent in 2011

* Calgary and Edmonton are both poised for house prices rising with an energy sector recovery

* Meanwhile Vancouver prices are also expected to rise by 3.7 per cent in 2011