Canadian real estate prices are rising, but no where is quite like Ontario right now. Canadian Real Estate Association (CREA) April data shows up to 50% annual price growth in the province. Every major market has seen composite home prices rise at least $100,000 since last year. It doesn’t matter if it’s in a big city, or a modest cottage in the middle of nowhere. The ticket to homeownership for a typical home has now reached over $500,000 in Ontario.
Ontario Home Prices Have Increased By Over 30% In All But 3 Markets
Ontario home prices increased by over 30% in all but 3 markets from last year, which is an absurd amount of growth. The benchmark price in the province’s major markets saw a median annual growth rate of 39.3% in April. More than half of markets saw a home rise by more than a third of its value over a year. Typical stuff people see in a recession when things are totally normal and under control.
Ontario Composite Benchmark Home PriceThe price of a typical home across Ontario. Source: CREA; Better Dwelling.
Home Prices In The Lowest Growth Markets Were Already Over $1 Million
The 3 markets with the lowest price growth also happen to be the most expensive in the province. Oakville ($1,342,300), Mississauga ($1,077,700), and Toronto ($1,025,200) are the three most expensive markets. Those markets saw the composite price make an increase of at least 17.8% though. The low growth had to do with high prices, not due to low demand.
Ontario Composite Benchmark Home Price ChangeThe annual percent change in price for a typical home across Ontario. Source: CREA; Better Dwelling.
A Modest Cottage In Ontario Now Costs Over $500,000
The highest rate of growth was seen in cottage country, where it now costs over half a million to buy one. Woodstock saw the largest growth with a composite benchmark of $588,500 in April, up 50.7% ($198,100) from last year. Tillerson was in second at $526,900, up 50.2% ($176,200) over the same period. Bancroft came in third with a benchmark of $394,200, up 50.0% ($131,400) from a year ago. All 3 markets are up more than 50% from last year.
Home Prices Increased By Over $200,000 In 5 Housing Markets
Price growth isn’t just translating into large growth rates, it’s huge dollar amounts. Five markets saw home prices rise by over $200,000: Oakville ($245,400), Hamilton ($214,800), Kitchener-Waterloo ($213,800), Southern Georgian Bay ($202,900), and Cambridge ($202,600). These small markets all saw home prices rise by double the annual household income.
Ontario Composite Benchmark Home Price ChangeThe annual change in price for a typical home across Ontario in dollars. Source: CREA; Better Dwelling.
Home prices across Canada are growing at a breakneck speed, but Ontario is the king of exuberance. When people talk about a hot market, they usually mean a price growth rate of 10 to 20 points. That’s now the minimum in Ontario, with it rising to 50 points in small towns.
Employment, shopping, and other amenities? Not a factor for most of these markets. Canadians were given cheap credit, and a double dose of FOMO. Now all they can imagine is home prices rising faster than they can afford them. This kind of growth is happening during zero population growth, in a recession.
Experts see the housing market cooling down in the not so distant future. It’s hard to explain to the average person that an improvement to the economy will be bad for home prices though. That’s the opposite of what most people were taught. There’s likely a significant portion of people that think this is as slow as things can be. Imagine how fast prices could rise if the unemployment rate wasn’t this high?
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