Canadians saw real estate prices rapidly climb over the past year. According to the Canadian Real Estate Association (CREA), the average home is now $100,000 more expensive than it was just last year. Despite the massive climb across the country, most of the prices increases were seen around the Greater Toronto Area (GTA), and Lower BC, while the rest of the country mostly saw prices move sideways.
Composite Prices Are Up
The average price of a home across Canada is rapidly increasing. Last month the composite benchmark, that is the price of a typical home in the country, reached $606,000 – a massive 19.76% increase from the same time last year. To give a little context, the year before that saw a 10.5% increase, and the 5 year trend before this year was 5.43%. To contrast, the US is having a scorching hot year too, and their prices are up only 6%.
Top 3 Areas Are Toronto Suburbs
The highest increases were seen around the GTA, where even surrounding cities are seeing steep increases. Toronto’s benchmark reached $811,300, a 31.68% increase from April of last year. The leafy suburb of Oakville/Milton saw a benchmark price of $784,400, a 31.04% increase. Guelph, a city surrounded by farmland just an hour away, saw prices climb to $403,300, a 26.39% increase. Also worth noting that all three cities are in the same economic region being called out by the Ontario government for domestic speculation.
Oil Provinces See The Least Increases
The bottom three cities on the list were all in oil provinces. Saskatoon was at the bottom of CREA’s list, where prices fell to $296,400, a 2.6% decline from last year. Calgary was just higher on the list, with prices hitting $435,500, a 0.93% decline. Third from the bottom was Regina at $292,900, a 0.38% increase from last year. Softer oil prices are likely a contributor to the drag on property prices.
Fast rising prices are normally great, but those typically come as a side effect of improved economic conditions. Canada however, is seeing home prices rise while wages stagnate and debt levels rise. Easy access to credit is sending home prices soaring, even in places they shouldn’t be.
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BoC Wisdom:
*POLOZ: WOULD BE ODD TO USE INTEREST RATES TO INFLUENCE ONE CITY
This is crazy. Even after support payments I make decent coin … enough that in a normal market I could afford a home on my own and still have lots left over. Not in this market. Not anywhere close to where I could find work. And no damn way will I pay the crazy prices on a 500 sq. ft. condo anywhere in the GTA. Even in Hamilton home prices are stupid for beat downs.
Agreed. I was almost buying the density narrative until they started saying Guelph is also a hot area. It’s literally just surrounded by farmland. Either the cost of food is going to skyrocket to adopt land values, or people are bidding way too much for land there.