Price rises in Vancouver and Toronto continue to dominate Canadian housing market
The national average property price in Canada increased by 8.2% year on year in March and sales were up 6.6% from a year earlier, the latest index shows.
This took the national average price to $548,517 but this continues to be pulled upward by activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.
However, the data from the Canadian Real Estate Association (CREA) shows that Greater Vancouver’s share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price. Even so, the average price is reduced by more than $150,000 to $389,726 if Greater Vancouver and Greater Toronto sales are excluded from calculations.
Month on month sales were up 1.1% in March, surpassing the previous monthly record set in April 2016 by 0.25% and sales were up from February in more than half of all local markets, led by the Lower Mainland of British Columbia, London and St. Thomas and Montreal.
Annual sales were up in close to 75% of all local markets with the Greater Toronto Area (GTA) recording the biggest year on year increase, which offset a decline in the number of homes changing hands in Greater Vancouver.
‘The current strength in national home sales mainly speaks to what’s going on in and around Toronto. Elsewhere, sales either remain slow or well below previous heights,’ said CREA president Andrew Peck.
The figures reveal regional variations. In the Fraser Valley and Greater Vancouver, prices have been recovering in recent months after having dipped in the second half of last year. Prices in the Fraser Valley and Greater Vancouver remain well above year ago levels with annual growth of 19.4% and 12.7% respectively.
Year on year prices increased by 20% in Victoria and elsewhere on Vancouver Island along with Guelph while Greater Toronto and Oakville-Milton saw prices rise in the 30% range in March.
In contrast, prices fell by 1.2% in Calgary and by 1.5% year on year in Saskatoon. Prices in these two markets now stand 5.4% and 5.1% below their respective peaks reached in 2015.
Home prices were up modestly year on year in Regina with a rise of 1.7% while in Ottawa they increased by 4%, in Greater Montreal by 3.3% and in Greater Moncton by 4.7%.
A breakdown of the figures show that prices for two storey single family homes recorded the strongest year on year gains at 21%, followed closely by townhouse/row units up 17.9%, one-storey single family homes up 16.6% and apartments up 16.3%.
According to Gregory Klump, CREA’s chief economist, the housing market statistics suggest that the tight housing market balance in Toronto and nearby cities stands in contrast to housing market trends elsewhere in Ontario and other provinces.
‘Because housing market balance varies by location, federal or provincial policy measures aimed at cooling demand in Toronto risk destabilising housing markets elsewhere,’ he added.
The figures also show that the number of newly listed homes rose 2.5% in March, led by gains in the GTA, Calgary, Edmonton and the Lower Mainland of British Columbia. With new listings having climbed by more than sales, the national sales-to-new listings ratio eased to 67.4% in March compared to 68.3% in February.
A sales to new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.
The ratio was above the sellers’ market threshold in about 60% of all local housing markets in March, the majority of which are located in British Columbia, in and around the GTA and across southwestern Ontario.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to completely liquidate current inventories at the current rate of sales activity.
There were 4.1 months of inventory on a national basis at the end of March 2017, down from 4.2 months in February and the lowest level for this measure in almost a decade.