Canada

Canadian Real Estate Price Gains Continue To Taper, Annual Growth Falls Below 2%

After years of overheated growth, Canadian real estate price gains are tapering. Canadian Real Estate Association (CREA) numbers show prices for a benchmark (a.k.a. typical) home across Canada slowed in growth in November. Prices are beginning to stall after years of explosive growth across most of the country.

Canadian Real Estate Prices Rise Less Than 2%

Canadian real estate prices are continuing to see annual price growth taper. The benchmark price of a typical home across Canada reached $618,800 in November, down 0.51% from the month before. Prices are up 1.98% when compared to the same month last year, and are up 43.06% over the past 5 years. Growth has now fallen behind inflation, and is on trend for further tapering.

Canadian Real Estate Benchmark Change

The 12 month price in change of a typical home across Canada.

Source: CREA, Better Dwelling.

Canadian real estate price gains are tapering, and on trend to hit negative growth. November’s annual pace of growth at 1.98%, is huge contrast to the 8.54% we saw the same month last year. Like last month, the minor increase has more to do with the rapid deceleration of price gains. Prices aren’t falling as quickly into winter as they were last year.

Vancouver Real Estate Is Canada’s Most Expensive Market

Vancouver, Oakville, and Fraser Valley are the most expensive markets in Canada. The price of a typical Vancouver home reached $1,042,100 in November, down 1.35% from last year. Oakville, an affluent suburb of Toronto, reached $955,400, up 3.4% from last year. Fraser Valley hit $841,600, up 4.72% from last year. Toronto followed with a benchmark of $686,400, an increase of 2.73% from last year.

Canadian Real Estate Benchmark Price

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

Source: CREA, Better Dwelling.

The cheapest markets were Moncton, Regina, and Saskatoon. The price of a typical home in Moncton reached $182,300 in November, up 17.25% from last year. Regina was the second most affordable with a price of $272,100, down 10% from last year. Saskatoon came in third at $293,500, down 5.34% from last year. Two of those markets, while more affordable than the rest of Canada, are still seeing prices drop.

Vancouver Island, Guelph, and Niagara Make Biggest Gains

The biggest annual gains were made in Vancouver Island, Guelph, and Niagara. Vancouver Island’s benchmark price reached $486,700 in November, up 12.65% from last year. In second was Guelph’s benchmark with $530,000, up 9.26% from last year. Niagara came in third with $393,500, up 7.19% from last year. Yes, none of Canada’s major cities made the list this month.

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.

The biggest losers in Canada are Regina, Calgary, and Barrie. Regina’s benchmark reached $272,100 in November, down 3.99% from last year. Calgary’s benchmark hit $418,300, down 2.88% from last year. Barrie fell to $466,400, down 2.0% from last year. Barrie is the only market in this list that hasn’t fallen behind the national average over the past 5 years.

Toronto Real Estate Suburbs Rise The Most Over The Past 5 Years

Canadian real estate prices made some absurd increases over the past 5 years. The benchmark in Niagara was $395,500 in November, up 79.03% over the past 5 years – the most in the country. The Hamilton benchmark reached $581,900, up 69.97% over the past 5 years. Vancouver reached $1,042,100, up 69.47% over the past 5 years. Across Canada, the typical gain is 43.06% over the past 5 years. For context, the UBS list of the largest real estate bubbles in the world has an average gain of 35% 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.

Not all markets made gains, most notably Regina, Saskatoon, and Edmonton. Regina’s benchmark price fell to $272,100 in November, down 10% over the past 5 years – the largest loss in the country. Saskatoon saw prices fall to $293,500, down 5.34% over the past 5 years. Edmonton’s benchmark came in at $321,800, down 0.7% over the past 5 years.

Canadian real estate prices made lofty gains over the past 5 years, so it shouldn’t be a surprise to see gains taper. Fewer sales and rising interest rates aren’t pointing to a reversal of this trend anytime soon.

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8 Comments

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  • Ian 9 months ago

    Same song, different chorus. In the late 1980s Canadians did this with the suburbs. Everyone diluted themselves into thinking that suburbs were massively underpriced, because real estate would eventually flow out into the burbs. Just like New York!

    Take a train 5 minutes outside of NYC, and you’ll find out that most homes in the region are still cheaper than Toronto’s suburbs.

  • Greg 9 months ago

    Better return than the Stock Market this year.

    • Ethan Wu 9 months ago

      Only if you paid in cash. Otherwise the cost of borrowing takes you well into negative returns.

    • Smaug 9 months ago

      Factor in interest, property taxes, maintenance and insurance. Nope.

    • Jay 9 months ago

      The stock market falling is an indicator that the real estate market will follow suit. It’s a bit ironic that you bring that up as a positive.

  • C 9 months ago

    http://creastats.crea.ca/stca/employment_trends.html

    https://www.ontario.ca/page/labour-market-report-november-2018#section-2

    Niagara….highest home price growth AND highest unemployment rate in Ontario….hmmmm???

    Merry Christmas real estate speculators, your 2019 is going to be fun!!

    • Simon Wong 9 months ago

      Also worth remembering those are seasonally adjusted number, which provide a positive winter bias. True Ontario numbers show a loss of 36k full-time jobs from October to November. Sure, seasonally adjusted numbers are great for economist that don’t do anything. The government doesn’t collect any taxes from these seasonally adjusted (aka non-existent) employees, however.

  • SUMSKILLZ 9 months ago

    Montreal 2018 Christmas parties feel like Toronto in 2016. Everyone, and I mean everyone, is excited about real estate. All I hear is talk about someone’s next move. I for one can’t believe how low prices are in the suburbs 20 minutes out. Of course salaries are low too, but Toronto broke that link to salaries so long ago its something I don’t think about.

    I want to scream, “winter is coming” to these folks, but choose to smile and say Merry Christmas to all! The wine selections on offer are wonderful this year.

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