Briefing highlights
- Toronto home prices soar, Vancouver slumps
- Consumer debt burden at a fresh high
Toronto speeds up, Vancouver slumps
The Toronto area’s housing market shows no signs of slowing down, while Vancouver’s appears down for the count.
For the second straight month, according to the latest reading of the Teranet-National Bank home price index, Vancouver eased from a month earlier, with prices down 1.3 per cent.
Of course, on an annual basis, Vancouver prices were still up a sharp 19.3 per cent in November.
Toronto, meanwhile, scored a record annual gain.
Vancouver has been hit on two fronts: First, from a provincial tax on foreign buyers of Vancouver area properties, followed by the latest national mortgage and tax measures by the federal government.
While Vancouver home sales have collapsed, we’re now seeing the monthly impact on prices. The Toronto area market is still powering ahead, though economists expect price growth to slow given the new federal measures.
“In Vancouver, prices declined in November for a second month in a row, for a cumulative drop of 1.9 per cent, concentrated in dwellings other than condos,” said National Bank economist Marc Pinsonneault.
“This is consistent with the fact that the decline in house sales since their peak last February started in detached dwellings, and is so far deeper in that category,” he added.
“Due to measures imposed by government (qualification for an insured mortgage, 15-per-cent tax on foreigners’ acquisitions, etc.), house prices still have downside in Vancouver.”
On a monthly basis, Toronto home prices rose 1.1 per cent in November from October, with Hamilton up 1.4 per cent, Montreal 0.9 per cent, Calgary 0.7 per cent, Quebec City and Victoria 0.4 per cent, and Halifax 0.6 per cent.
Prices slipped 0.8 per cent in Ottawa-Gatineau, and 0.2 per cent in each of Winnipeg and Edmonton.
Year over year, Toronto prices rose at a record pace of 18.5 per cent, and Hamilton at a record 16.3 per cent. Prices climbed 16.3 per cent in Victoria, 3.1 per cent in Winnipeg, 1.8 per cent in Ottawa-Gatineau, 2.6 per cent in Halifax, and 0.1 per cent in Montreal.
They slipped 0.2 per cent in Edmonton, 0.7 per cent in Quebec City, and 1.7 per cent in Calgary.
“Sales continued to rise in Toronto, reaching record levels whether in the apartment category or for other types of dwellings,” Mr. Pinsonneault said.
“We have yet to see a slowdown in response to the new ruling regarding the qualification for an insured mortgage,” he added.
“Toronto, Hamilton and Victoria are the three metropolitan regions pulling the composite index up month after month.”
Richer but ...
We’re richer, for sure, but also deeper in debt.
And both have to do with the aforementioned house prices.
Household net worth in Canada is up 7.7 per cent from a year ago, at a record $10.1-trillion, Statistics Canada reports.
And much of that has to do with the rise in home prices.
But household debt is also up, to $2-trillion in the third quarter.
And when all is said and done, the key measure of household debt to income now stands at a record 166.9 per cent, up from 166.4 per cent in the second quarter.
“The rise in the debt-to-income ratio is ostensibly the highlight of today’s snapshot of households’ financial positions, notably as the uptick occurred despite an outsized boost in personal incomes attributed to the child care benefit payments that began in July,” said Royal Bank of Canada economist Laura cooper.
“Encouragingly, the household saving rate did surge by a full percentage point over the period to reach its highest level since Q1/01,” she added.
“That said, the further deterioration in the oft-cited debt metric will serve to strengthen the Bank of Canada’s appraisal that elevated household indebtedness remains a key vulnerability to financial stability.”