Ottawa led Canadian cities in rising home prices this August, with its benchmark price up almost 10% year-over-year, according to the Canadian Real Estate Association (CREA).
The nation’s capital has experienced gains throughout the year, in line with a trend that has seen high demand for smaller, but still urban, cities. It’s almost certainly because single-family homes in Toronto and Vancouver continue to be out of reach for most prospective buyers, with average sold prices well over $1.5 million in the central neighbourhoods. These prices are driving buyers into cheaper cities, where a good job and a detached house are still realistic possibilities.
Accordingly, Montreal and Guelph, with homes available between $500,000 and $620,000 take second and third places for greatest year-over-year gains, up 7.53% and 7.17% respectively.
Meanwhile, Greater Vancouver’s benchmark price is down 8.18% to $983,100, whereas Greater Toronto fared better, rising 4.80% to $801,200 (those prices include a far wider scope than the city centre and also include dense, less expensive properties like condos). However, CREA notes that in recent months home prices have been stabilizing in British Columbia and price growth has begun to rebound among markets in the Greater Golden Horseshoe.
The overall benchmark for properties in the 19 markets that CREA tracks was essentially flat, edging up just 0.9% year-over-year and 0.8% from July to August. The aggregate sales price is now $626,200. The benchmark is the best metric we have for measuring a “typical” house prices because it eliminates outliers at the top and bottom of the market. In comparison, the average home price rose 3.9% year-over-year to $493,500, or $393,000 when you exclude the hyper-expensive markets of Vancouver and Toronto.
Sales rebounded from February when they reached a six-year low, and are now up 5% year-over-year. Nevertheless, activity is still far below 2016 and 2017 when the Greater Toronto and Vancouver markets were on fire and before the provincial governments of Ontario and British Columbia stepped in with various regulations designed to chill the market.
CREA continues to blame the mortgage stress-test for slower activity in the market. Buyers now have a hard time borrowing enough to make an offer. Interest rates recently declined, however, which has helped somewhat, but buyers are still limited.
The Prairies continue to suffer from an excess of inventory and are the only cities in Canada that have declined over the longer-term, with benchmark prices down in Calgary (8.44%), Edmonton (7.12%), Saskatoon (-8.48%) and Regina (9.73%) compared to five years ago. All other Canadian cities tracked by the benchmark have experienced huge gains over the last five years, with the Fraser Valley and the Niagara Region up over 70%.
For more information on August’s national housing market, check out the infographic below: