The average price of a home in Canada is now $375,810, slightly higher than year-ago levels. But behind the aggregate numbers are wide variations in what’s happening with housing.
Figures from the Canadian Real Estate Association show average prices are 0.9 per cent more than a year ago. Prices are higher, on a year-over-year basis, in 80 per cent of all local markets in the country.
The annual climb in prices doesn’t sound like much. But back in 2000, average residential prices were less than half where they are today – at about $150,000.
The report comes as a growing number of economists and policy makers are concerned about a correction in the housing market, and in particular, Toronto’s condo market, where construction continues at a blistering pace. Meantime, Bank of Canada Governor Mark Carney has repeatedly warned Canadians that rising household debt is the No. 1 domestic risk to the economy.
Opposing trends in two of Canada’s largest cities are skewing the national numbers, says Gregory Klump, CREA’s chief economist.
For one, the high-end market in Vancouver is rapidly cooling, putting downward pressure on prices there. Take Vancouver out of the national average price calculation, and home prices are 4.9 per cent higher than last year, he calculates.
At the same time, Toronto is galloping ahead. “Higher-priced sales activity there is on the rise and buoying average prices,” he said. As the most active housing market in Canada, “Toronto is the biggest factor supporting national average price.”
Strip Toronto out, and prices are actually down, 2.2 per cent, on an annual basis.
Netting out both Vancouver and Toronto shows a 3.1-per-cent increase in average price.
Toronto is by no means the only hot market in Canada. To really understand the diverging trends in housing, check out these price changes by city. They are based on CREA’s numbers, comparing the first four months of this year with the first four months of 2011 on a seasonally-adjusted basis (note Newfoundland, because of its smaller market, comprises one grouping):
CANADA’S HOTTEST MARKETS
Newfoundland & Labrador +12%
Thunder Bay 8.5%
CANADA’S COOLEST MARKETS:
Saint John -3.2%
Fraser Valley -1.4%
Sherbrooke, Que. +0.2%