The Canadian Real Estate Association (CREA) recently released two reports on housing sales in February 2016 and their housing forecast through 2017. With total sales hitting the highest levels since June 2007, the organization has changed their earlier bearish stance to a continued upward trend through at least the early part of next year. That said, large urban areas in southwestern B.C. and the Hamilton to Toronto corridor are largely responsible for any gains.
“Two of Canada’s hottest housing markets [B.C. and Ontario] look set to stay that way heading into the spring homebuying season,” said CREA President Pauline Aunger in a press release. The Greater Vancouver area had the highest year-over-year price jump in the country at 22.18%, with the Fraser Valley area following close behind with a 19.39% increase in average sale prices. House prices in Victoria rose about 10% and the rest of Vancouver Island averaged a 5.7% increase.
With the average price of a detached house in Vancouver hitting $1.4-million in February, they’re now out of the range of affordability for most Canadians.
In Toronto, where detached houses now go for $1.3 million, it should come as no surprise that prices overall climbed by 11.3%. (As with Vancouver, RBC predicts that buying a detached home in Ontario’s capital is out of the price range for the average Canadian, with the condo market also climbing out of the range of affordability.) Prices in Ottawa were more-or-less stable, with a slight 0.82% increase. Overall, prices in Ontario rose a combined 8.2%, largely influenced by the Toronto market.
Nationally, average home prices by 16.4% on a year-over-year basis. But when you pull Ontario and British Columbia out of the equation, prices actually dropped by 1.4%. In Calgary, the downturn in the oil industry is impacting the housing market, with average prices dropping by 3.5% over the previous year. Total sales in Alberta are expected to decline by nearly 20% as homeowners sit tight – rather than upsizing – with so much uncertainty looming.
With Saskatchewan’s economy also heavily tied to the oil industry, Saskatoon experienced a notable three percent price drop. Newfoundland, another oil-producing province, will likely see price drops. In fact, the province has gone from a have to a have-not province with blistering speed. Unemployment stands at 14.1% – the highest in the country and double the rate in B.C. – and the provincial deficit is a record $2 billion. The one area in Atlantic Canada that did see prices rise significantly was Greater Moncton, where sale prices climbed 6.97%.