Canadian real estate prices have been rising quickly, but it’s never been like this before. Canadian Real Estate Association (CREA) data shows home prices made a big jump in March. Over the past 12 months, home prices increased more than they did over the previous 4 years. That’s just at the national level. More than a half-dozen Canadian markets saw prices rise more in the past year than in the decade prior.
Canadian Real Estate Prices Made One of The Largest Jumps Ever
The typical home across Canada saw prices make a record climb over the past year. The benchmark price in March is $119,700 higher than a year before. The price increase over the past 12 months was similar in size to the previous 46 months. That’s right, on average, a typical home in Canada condensed 4 years of gains into a year. That’s a typical home, not detached. That’s across Canada, not in a high-growth region.
Canadian Composite Benchmark ChangeThe 12-month change of a typical home price across Canada, in Canadian dollars. Source: CREA; Better Dwelling.
Seven Canadian Real Estate Markets Saw Over A Decade of Gains Crammed Into One Year
Think that’s extreme? It’s not even close to the amount prices are increasing in some cities. North Bay’s increase in dollars over the past year was similar in size to the gains it made in the 15 years prior. That was the largest in the country, but it’s far from an isolated situation.
Canadian Home Price Change In MonthsThe annual change in home prices for March 2021, expressed as the number of months prior to March 2020 it took to make the equivalent gain in Canadian dollars. Source: CREA; Better Dwelling.
The second and third fastest growth is in Moncton and Saskatoon, respectively. Moncton home prices also made a gain similar in size to the 15 years prior. Saskatoon, the Paris of the Prairies, saw prices over the past 12 months rise more than the 12 years prior. The CREA HPI had seven markets with annual price gains larger than a decade of gains prior.
Toronto Home Prices Make A Huge Climb, But It Barely Registers
Toronto real estate prices are very fast-rising, they are just slower than average. The typical home was up 16.53% in March, compared to the same month a year before. Home prices over the past 12 months were similar in size to the previous 37 months, or 3 years. Despite huge growth on its own, the region underperformed national annual growth.
Vancouver Real Estate Prices Climbed At A Similar Pace To Toronto
Greater Vancouver real estate also compressed years of gains over the pandemic. The typical home in the region was up 9.35% in March, compared to the year before. The dollar value increase since the pandemic was the equivalent of the prior 37 months or about 3 years. While it is the same number of years as Toronto, home price growth has been much slower in Vancouver. Though a 9.35% annual price increase is still a very large gain for a single year.
Over the pandemic, home prices across Canada increased by more than they did in the prior 4 years. That’s at the national level — there are markets cramming over a decade of gains into a few months. The government stating it is unacceptable for prices to drop created moral hazard. Now homebuyers are playing a massive game of chicken with them. They’ll pay any price, assuming it will be backstopped. If politicians don’t backstop them, or can’t, they better polish off that resume.
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