Home prices in Canada up 2.8% year on year in September

Residential property sales in Canada increased by 2.1% from August to September but were well below the 11% growth recorded at the same time in 2016.

The data from the Canadian Real Estate Association (CREA) also shows that the average price of a home increased by 2.8% year on year in September to just over $487,000.

A breakdown of the data reveals that the national average price is heavily skewed by sales in Greater Vancouver and Greater Toronto, two of Canada’s most active and expensive markets. Excluding these two markets from calculations trims more than $110,000 from the national average price to just above $374,500.

Activity was up between August and September in about half of all local markets, led by Greater Vancouver and Vancouver Island, the Greater Toronto Area (GTA), London and St. Thomas, and Barrie.

In and around the Greater Golden Horseshoe region, some markets posted monthly sales gains while activity in others remained near recent lows or fell further, the data also shows and sales were down from year-ago levels in close to three quarters of all local markets, led by the GTA and nearby housing markets.

‘National sales appear to be stabilizing. While encouraging, it’s too early to tell if this is the beginning of a longer-term trend. The national result continues to be influenced heavily by trends in Toronto and Vancouver but housing market conditions vary widely across Canada,’ said CREA president Andrew Peck.

According to Gregory Peck, CREA chief economist, a further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada. ‘It also jeopardizes Canadian economic growth, which is already showing signs of fading,’ he added.

The number of newly listed homes rebounded by almost 5% in September following three consecutive monthly declines. The national result was largely the result of a jump in new supply in the GTA.

The report shows that there were five months of inventory on a national basis at the end of September 2017, unchanged from August and broadly in line with the long term average for the measure.

At 2.4 months, the number of months of inventory in the Greater Golden Horseshoe region is up sharply from the all-time low of 0.8 months reached in February and March. However, it remains below the region’s long term average of 3.1 months.

The deceleration in price gains largely reflects softening price trends in Greater Golden Horseshoe housing markets tracked by the index. While price trends continue to vary widely by region, benchmark home prices were up from year ago levels in all 13 markets tracked, something that has not happened in close to seven years.
Apartment units again posted the largest year on year growth in September with a rise of 19.8%, followed by townhouse/row units up 13.5%, one storey single family homes up 7.9% and two storey single family homes up 7.2%.

After having dipped in the second half of last year, benchmark home prices in the Lower Mainland of British Columbia have recovered and now stand at new highs with Greater Vancouver up 10.9% year on year and Fraser Valley up 16.2%.

Benchmark home price increases have slowed to about 15% on an annual basis in Victoria, while still running at about 20% elsewhere on Vancouver Island while prices slowed further year on year in Greater Toronto, Oakville-Milton and Guelph. However, prices in those markets remain well above year ago levels, up 12.2%, 8.8% and 17.3% respectively.

Calgary benchmark prices remained just inside positive territory on a year on year basis in September with a modest rise of 0.6%. Meanwhile, home prices were up year on year by 7.7% in Regina and turned positive in Saskatoon, posting their first annual gain since the middle of 2015.

Benchmark home price growth accelerated in Ottawa with a 6.2% year on year rise, in Greater Montreal the 5.1% annual rise was led by an 8.3% increase in prices for townhouse/row units and Greater Moncton 5.4% annual growth was led by a 7.2% increase in one single family home prices.

For Ottawa and Greater Montreal, the September 2017 year on year price gains were the largest since November 2010 and May 2011 respectively.