The gap between how quickly home prices are growing in Toronto, Calgary and Vancouver, compared with the rest of the country, is growing.
That’s one of the things that Brookfield RPS found when it crunched some numbers for The Globe and Mail to look at the increasing disparity between those three major cities, which represent one-quarter of Canada’s housing stock, and the remaining places that form the bulk of the national market.
It found that average property values in Toronto, Calgary and Vancouver areas combined have risen by 83 per cent over the past decade, from $345,000 to $634,000, while those in the rest of the country have risen by 60 per cent, from $205,000 to $327,000.
In the past year average property values in the three cities have risen by 9 per cent, from $578,000 to $634,000, while those in the rest of the country have risen by 3 per cent, from $317,000 to $327,000.
The two recent periods where values in Toronto, Vancouver and Calgary seem to have really accelerated over the rest of the country were in the first quarter of 2009, just after the worst of the financial crisis, and in the second quarter of 2013, when mortgage rate wars started to heat up, Brookfield points out.
“While these major markets have seen very strong growth, there is still 75 per cent of the Canadian market that generally follows a different trend-line,” it said.
Drilling down further, the price growth in the three cities has really been driven by detached homes in the downtown areas.
To study this in detail Brookfield looked at just the 416 area code in Toronto, Vancouver without areas such as Richmond and Burnaby, and Calgary without areas such as Airdrie and Rocky View. In Toronto, detached downtown houses saw prices rise 75 per cent over the past decade, from $425,000 to $742,000, in Vancouver detached downtown houses saw prices rise 174 per cent from $585,000 to $1.6-million, and in Calgary prices rose 99 per cent from $267,000 to $530,000.
“On an overall weighted basis, these three sub-segments of the Canadian market combined grew by about 100 per cent over the last decade,” Brookfield says.
Toronto has about 275,000 detached homes, representing 2.1 per cent of the total Canadian housing stock. Calgary has 249,000, making up 1.9 per cent, and Vancouver (without Richmond, Burnaby and North and West Vancouver) has a mere 48,000, about 0.4 per cent of the overall stock.
In other words, the detached homes that are adding so much fuel to overall average Canadian home price growth make up only 4.4 per cent of the country’s housing stock.Report Typo/Error
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