Canada's two largest housing markets are going in different directions, with the Greater Toronto Area poised for another rally in 2017 while the Vancouver region girds for a decline.
Royal LePage forecasts the median residential price in the GTA will jump 10 per cent this year while Greater Vancouver will experience an 8.5-per-cent price decrease for various housing types.
"People in Toronto think that they live in this outlandishly expensive region, but they don't realize just how affordable homes are relative to the price of homes in Vancouver. There is a dramatic difference," said Phil Soper, chief executive officer of the real estate firm.
Last month, the average price for detached houses sold in the Real Estate Board of Greater Vancouver's territory was $1.68-million, compared with $1.02-million in the GTA. In the city of Vancouver, the price for detached properties averaged more than $2.6-million last month, compared with $1.29-million for sales in the city of Toronto.
The GTA tops the list of nine selected major markets covered by Royal LePage in its 2017 outlook. Other price gains are envisaged in Greater Montreal (4 per cent), Calgary (2.5 per cent), Winnipeg and Halifax (2 per cent), Ottawa (1.7 per cent) and Regina (1 per cent). Edmonton is forecast to have a decline of 0.9 per cent, leaving Greater Vancouver trailing the pack in the forecast.
For the nine markets as a whole, the median price is predicted to reach $574,000 this year, up 2.8 per cent from last year.
Mr. Soper said Greater Vancouver prices could rise modestly this spring because of the seasonal trend of busy sales activity. But he expects muted activity for much of 2017, after Canada's most expensive housing market got out of control in the first half of 2016 before prices started falling in the second half.
"This is an affordability-driven correction, not one based on economic fundamentals. We're not looking at a financial crisis," he said, noting the B.C. government implemented a 15-per-cent tax on foreign home buyers in Metro Vancouver last August and Ottawa tightened mortgage lending rules in October.
Royal LePage produces a price composite in a formula that focuses on typical properties and excludes sales of luxury mansions. It said its large sampling provides a better barometer of trends than average prices, which are skewed upward by sales of high-end properties.
The real estate firm examines the city of Vancouver and seven suburbs to provide its representation of Greater Vancouver. The typical two-storey price is up 27 per cent over the past year to a median of $1.6-million in the Vancouver region, compared with a 17.5-per-cent increase to $846,536 in the GTA.
The firm's two-storey price composite for the city of Vancouver soared to $2.6-million in the fourth quarter, up 27.7 per cent from the same period last year. The city of Toronto saw a 14.3-per-cent increase to $1.02-million in the two-storey category, while the suburb of Richmond Hill experienced a 30.5-per-cent surge to $1.22-million.
Economists have warned about about high prices in and around Vancouver and Toronto.
Nationally, in 53 markets measured, Royal LePage's two-storey price composite climbed to $661,730 in the fourth quarter, up 14.3 per cent from a year earlier. Over the past year, the national median price for all housing types increased 13 per cent to $558,153, and in the condo market, the price rose 7.4 per cent to $356,307.
Royal LePage's data show housing markets in Calgary and Edmonton remain in a downturn. Calgary's two-storey price composite was $500,153 in the fourth quarter, down 1.6 per cent from the same period in 2015. In Edmonton, the price slipped 1.8 per cent to $434,924.
On Wednesday, the Calgary Real Estate Board forecast the benchmark price for detached houses sold will rise slightly by 0.8 per cent this year while condo prices will slip 2 per cent.
Mr. Soper pointed out the price gap between detached houses and condos is much wider in the Vancouver region than in the GTA.
Data compiled by real estate boards show condos sold last month in the Real Estate Board of Greater Vancouver's territory averaged $588,922, or nearly $1.09-million less than the price for detached properties. In the GTA, the price for condos sold in December averaged $440,669, or $575,476 lower than the detached price.