Canada

Canada’s Best Performing Real Estate Markets Aren’t Toronto or Vancouver

Canada’s real estate hubs of Toronto and Vancouver are slowing down. Canadian Real Estate Association (CREA) numbers show the price of a typical home in small cities climbed the most over the past year. In fact, the economic suburbs of Toronto and Vancouver have outperformed the cities over the past 5 years.

Vancouver Real Estate Is The Most Expensive In Canada

Vancouver, Oakville, and Fraser Valley are the most expensive real estate markets. Vancouver’s composite benchmark reached $1,070,600 in September, up 2.21% from last year. Oakville, an affluent suburb of Toronto, reached a benchmark of $952,700, up 1.35% from last year. Fraser Valley reached $860,300, up 8.48% from last year. All three of these markets are experiencing rapid deceleration of prices.

Canadian Real Estate Benchmark Price

The price of a typical home in Canada’s largest real estate markets.

Source: CREA, Better Dwelling.

Victoria Real Estate Leads Canada For Price Gains This Year

Smaller cities are outperforming Canada’s largest ones, especially in BC. Victoria made the largest advance with prices hitting $694,200 in September, up 8.71% from last year. Fraser Valley is in second with a benchmark of $860,300, up 8.48% from last year. Guelph was in third with a typical home pricing at $522,300, up 8% from last year. Two of those markets claim agriculture as the top industry, which may have larger economic Implications.

Canadian Real Estate Price Change – 1 Year

The 1 year percent change in the price of a typical home, in Canada’s largest markets.

Source: CREA, Better Dwelling.

Fraser Valley Real Estate Is Canada’s Best Performing Market

Fraser Valley, Niagara, and Vancouver lead the country when it comes to the 5 year trend. Fraser Valley prices have increased a whopping 88.12% over the past 5 years. Niagara saw the second largest gains in the country, with prices up 75.7% is from last year. Vancouver is the third highest, with prices climbing 74.45%. For context, the price of a typical home across all markets is up 44.49% over the past 5 years.

Canadian Real Estate Price Change – 5 Year

The 5 year percent change in the price of a typical home, in Canada’s largest markets.

Source: CREA, Better Dwelling.

Toronto and Vancouver real estate dominates headlines, but don’t have the best returns. Economic suburbs with largely agricultural economies have the biggest climbs. Fans of Henry George and Robert Shiller know what that usually means.

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24 Comments

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  • Ethan Zheng 4 months ago

    Speculators gone wild. Bet most of this land in the suburbs are Boomers from the city trying to become land speculators.

    • Geert O 4 months ago

      Lots of young people in Victoria and Fraser Valley. If you want to start a family, you can’t do it in Vancouver. Have to move out to the Valley.

      • Rick 4 months ago

        If you want to start a family, you should just move out of BC. No expectation that my kids should stay here. A few extra dollars today adds up to a big difference by the time you’re ready to retire.

    • Jim Powers 4 months ago

      Trying to imagine where young people would work in Niagara, outside of tourism. It’s not exactly a bustling hub, where people can migrate and start buying $1 million cottages. Maybe retiring Boomers, but I’m not seeing young people there.

  • TME 4 months ago

    Niagara’s a high tech hub for haunted houses, duh! bwahahaha

    • SUMSKILLZ 4 months ago

      More like Whack-a-Mole. Torontonians invaded Hamilton area, jacked prices, Hamilton folks drove until they qualified….viola Niagara Falls? not that I know what I’m talking about.

      • Trevor 4 months ago

        Nope, that’s right. The inter city migration of Toronto implies a good number of young people left, and Hamilton gained young people. Not sure if they would have migrated to Niagara yet though, it’s kind of a retirement village down there.

  • Michelle 4 months ago

    It makes sense. Victoria is the recipient of Vancouver’s outcasts. As prices rise in the core cities, these “suburban” cities will become more dense and attractive to young people.

    • Yuzheng 4 months ago

      No it doesn’t. There’s no major employers out there. Retiring Boomers maybe.

  • Robert Lee 4 months ago

    Millennials will complain about anything. It’s too expensive in the cities, it’s too expensive in the suburbs. Maybe if you didn’t get a degree that only qualifies you to work in a coffee shop, you wouldn’t be complaining about affordability.

    • Mtl Matt 4 months ago

      Please tell me you’re being sarcastic.

      • Steve Ashton 4 months ago

        I hope so, but Boomers or Realtors have rolled into the comment section to defend prices recently. You can usually tell, because they have no actual data to support the claim, just it always goes up and millennials are the devil.

    • Michael 4 months ago

      That’s nonsense, even if you have a job in IT and are pulling in a 100K. Unless you have family that can help you with a substantial downpayment, a house/condo is far out of your reach in most cities where starting price for a shoebox is $500k unless you want to live paycheque to paycheque. It stopped being about lazy Millennials a long time ago, it bothers me to no end when I see these comments made by boomers.

  • Just Here To Learn, Don't Attack 4 months ago

    Someone explain Robert Shiller?

    • Trader Jim 4 months ago

      Early Shiller work. Housing bubbles are the result of the misplacing of land. If it’s spreading to places without density, people are no longer using fundamentals. Instead, they’re saying Toronto is worth X, so outside of Toronto is worth 80% of X. If Toronto itself is mispriced, you get a really big flush in the suburbs. We won’t know how much until a recession knocks the wind out of it though.

      • Harvey 4 months ago

        Thanks Trader. I was wondering about that reference too. Makes sense.

      • MH 4 months ago

        Usually it’s liquidity (or rather lack thereof) that knocks the wind out. Recession/hangover follows. That’s why money markets rule everything else.

        When mania grips a market also there comes a point where people suddenly start questioning the price assigned to a tulip bulb or or a pile of construction materials arranged in a certain way, and can’t find any meaningful answer… the spell is gone (along with the remaining liquidity).

        Plenty of liquidity-related news lately…

  • Jason Chau 4 months ago

    Would now be a good time to buy in Niagara then? If Toronto is going up, there’s probably room to make more money.

    • Ethan Wu 4 months ago

      Please seek professional help before you start investing. You normally sell your highest performing assets, and buy lagging assets. Last year would have sold your Toronto and Vancouver, and bought Ottawa or Montreal.

    • RMS 4 months ago

      Montreal would probably be the safer investment. Calling it now, 3-5 years from now, everyone in Montreal is going to be priced out.

  • Grizzly Gus 4 months ago

    Study conducted in April 2018, looking at home buyers who had purchased in the last year. Guess we are looking at purchases made between March 2017 and March 2018.

    Results found that 85% of first time buyers maxed out what they were allowed to borrow. There number one criteria for buying was affordability. This ranked above neighborhood, proximity to work and condition of the home.

    Basically. Borrow every cent I can to buy whatever home I can, wherever, even if it is falling apart.

    Even funnier, only 76% are confident that they will still be able to make their monthly payments……………. You only bought a year ago for Christ sake! 24% already worried about a squeeze and they have only been in their “dream” home for a year.

    To quote the wise Blue “Tick, Tock”

    https://www.theglobeandmail.com/business/article-cmhc-survey-reveals-a-vast-majority-of-first-time-home-buyers-maxed/?cmpid=rss&utm_source=dlvr.it&utm_medium=twitter

    • vnm 4 months ago

      That’s truly frightening considering interest rates are on the way up — and it’s either that or next stop Venezuela.
      With rates as low as they are now, it ‘s only going to take a few incremental increases for mortgage payments to double.
      Even with the dramatic reduction in rates in the early 90s meltdown, home prices still tanked by 50% in many “high demand” areas of Toronto. What is going to happen this time around when interest rates have nowhere to go but up?
      And the BofC is not going to risk tanking the Canadian economy to rescue underwater “investors”.

      Year 5 Year Fixed Avg Year Prime Rate
      1989 12.24 1989 10.50
      1990 12.01 1990 10.00
      1991 12.13 1991 9.50
      1992 9.71 1992 6.50
      1993 9.47 1993 6.00
      1994 7.33 1994 6.00
      1995 10.60 1995 8.50

  • Asterix1 4 months ago

    It is a shame the real estate industry cannot adapt peacefully to this changing environment, with a little grace and self respect!

    Instead, it goes down without an inch of class, lying, screaming, scratching and trying to still push FOMO and false reports onto the indebted masses.

    The RE game has changed, forever! (Technology, rates, debt levels). Can easily see +60% of agents dissapearing in next 3 years.

    • vnm 4 months ago

      Canadian Census Metropolitan Areas ranked by median family income[edit]
      Rank Census Metropolitan Area Population Median
      Family Income
      1 Calgary CMA 1,214,839 $104,410
      2 Edmonton CMA 1,159,869 $101,870
      3 Regina CMA 210,556 $97,940
      4 St John’s, NL CMA 196,966 $96,320
      5 Ottawa CMA 1,236,324 $96,135
      6 Saskatoon CMA 260,600 $94,580
      7 Oshawa 149,607 $92,080
      8 Greater Sudbury CMA 160,770 $90,550
      9 Victoria, BC CMA 344,630 $89,640
      10 Hamilton CMA 721,053 $87,590
      11 Québec, QC CMA 765,706 $87,570
      12 Kitchener-Cambridge-Waterloo CMA 477,160 $86,930
      13 Kingston, ON CMA 159,561 $86,870
      14 Thunder Bay CMA 121,596 $86,410
      15 Halifax CMA 390,096 $85,940
      16 Winnipeg CMA 730,018 $81,880
      17 London, ON CMA 474,786 $80,570
      18 Vancouver CMA 2,463,431[3] $72,662[4]
      19 Windsor, ON CMA 319,246 $78,700
      20 Toronto CMA 5,928,040[1] $78,373[2]
      21 Saint John, NB CMA 127,761 $77,730
      22 Montréal CMA 3,824,221 $76,950
      23 Saguenay, QC CMA 157,790 $76,880
      24 St. Catharines–Niagara CMA 392,184 $74,170
      25 Abbotsford-Mission, BC CMA 170,191 $73,960
      26 Sherbrooke, QC CMA 201,890 $73,250
      27 Trois-Rivières, QC CMA 151,773 $71,520

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