Canada

Canadian Real Estate Markets Crammed Up To 15 Years of Price Gains Into One Year

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 Change

The 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 Months

The 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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12 Comments

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  • Adam J 6 months ago

    I don’t know when or if prices fall, but there’s going to be a lot of tears.

    Either because homeowners will need to ride out negative equity, or because wages will need to rise so much it makes it impossible to not be a mega employer.

  • Omar 6 months ago

    15 years of prices gains in one year.

    Sounds like the perfect time to buy a townhome in this place. Haha. YEESH.

    • Ed Higgins 6 months ago

      It might sitck. People think work from home isn’t going to stick, but in reality it’s been around a lot longer than people think. It only took a break for people to actually visit small towns to see if they would like them more.

      Now where do the people from these small towns go though?

      • Paul 6 months ago

        From what I know about real estate to their parents houses or trailer parks and I don’t mean that in a cruel way as this seems to be the case in the United States.

        The bigger question that I am asking that needs answering is; the narrative that people will use the equity in their home to finance their retirement was actually predicated on them moving out to a less densely populated area in the country side etc. If the feeding frenzy is pushing those prices up and buyers keep saying that prices will never come down, simply where are these owners going to downsize too? It only made sense when the outlying areas were 10% the value of houses in your major city centres. Maybe they will move in with their kids… who will have a 40 year mortgage and need to bump to their principal so they can pay the house down.

  • GTA Landlord 6 months ago

    You couldn’t give away a cottage two years ago. Now inexperienced buyers are willing to pay $800k for anything that touches water…. in a country with more shoreline than it knows what to do with.

    If I have to deal with vacuuming my own crap out of a box under the house, I better get a big discount compared to owning in a municipality.

    • Paul 6 months ago

      I’m not sure I would describe cottage country as “couldn’t give it away.” In the last thirty years or so most of the older generation were downsizing to a condo to stay in the city or moving to their country property. The WFH generation just skipped a 30-40 year gap and did it now rather than later. My guess is they don’t care about PAYING someone to vacuum out their septic.

      And they probably aren’t landlords….

    • James Ling 6 months ago

      “You couldn’t give away a cottage two years ago” really shows how out of tune you are. Cottage country has been on an absolute rip for over 12 years now.

      • Sam 6 months ago

        It’s been deeply saddening to witness the rampaging billionaires push out the millionaires from the Muskokas over the last 20 years….forcing them up to Nipissing or even further north.

  • V 6 months ago

    The poeple running the Country are idiots!

  • Dd 6 months ago

    I just learned that a non bank lender just came out with a 40 year amortization conventional product qualifying at the contract rate of the mortgage. Where are the regulators? What a joke. House prices are not going to fall and may even continue to increase albeit at a slower pace.

  • MR 6 months ago

    A friend of mine with a decent job was paying 850 dollars for a basement in Toronto. When the pandemic hit the homeowner got mortgage deferrals + CERB and my friend kept paying rent as a good renter. By August the homeowner saved enough for basement renovation, he asked my friend to leave the house, my friend is a good person, he just moved and rented a place by $1300. After minor renovation the homeowner bumped the rent to $1200, his property value increased 200,000. My question is what my friend got? A $500 increase in rent and now increased grocery prices?

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