Canada

Canadian Real Estate Prices Are Seeing Growth Slow, Just Not In Toronto: Stat Can

Canada’s major real estate markets are seeing price growth slow — the rate was just really high. Statistics Canada (Stat Can) updated its Residential Property Price Index (RPPI) for Q4 2021. The six-city index didn’t grow fast enough to prevent annual growth deceleration, though. Growth remains high, but it’s finally beginning to slow — except in Toronto. 

Canada’s Major Real Estate Markets Are Seeing Price Growth Slow

Canada’s national statistics agency uses a 6-city index for tracking home prices. The index shows home prices increased 2.0% in Q4 2021 and are 13.9% higher than a year before. According to the agency, at a high level, home prices in Canada’s major cities are slowing in growth. Of course, this depends on the city and the type of construction.

Canadian Residential Property Price Index Growth

Canadian residential real estate annual price growth for the Statistics Canada 6-City RPPI.

Source: Statistics Canada; Better Dwelling.

Let’s start with new home prices, which are seeing the growth rate accelerate. RPPI shows new home prices increased 2.0% in Q4 2021, and are now up 9.2% from a year before. The segment is underrepresented, but catching up to total annual growth. 

Existing-home sale prices are where the deceleration happened last quarter. The agency found home prices increased 2.1% in Q4 2021, and are 16.2% higher than a year before. The rate is astronomical still, but an 80 basis point drop is a fast cooling growth rate. It might be a sign a little normalization is on the horizon.

Toronto Real Estate Sees Annual Price Growth Accelerate

Toronto real estate is one of the indexed markets that didn’t slow down and is showing acceleration. Home prices in the region showed 2.6% growth in Q4 2021, helping to drive 14.7% annual growth. Both numbers outperformed the index, with annual growth larger than the previous quarter. 

Toronto Residential Property Price Index Growth

Toronto residential real estate annual price growth for new and existing-home sales.

Source: Statistics Canada; Better Dwelling.

Toronto saw a similar trend in regards to new home prices underperforming. New home price growth is up 2.4% in Q4 2021 and is 7.4% higher than a year before. Existing-home prices climbed 2.7% in the same quarter and are up 17.6% from a year before. The growth rate for existing-homes is over twice that of new homes. It’s also worth mentioning that both segments accelerated in growth, unlike the RPPI.

Vancouver Real Estate Slows For A Third Consecutive Quarter

A bit of a surprise on this one, but Stat Can sees Vancouver real estate underperforming the index. Home prices increased 2.2% in Q4 2021 and are now 12.8% higher than a year before. It’s the third consecutive quarter with annual growth showing deceleration. The growth rate peaked in Q2 2021, according to the agency. 

Vancouver Residential Property Price Index Growth

Vancouver residential real estate annual price growth for new and existing-home sales.

Source: Statistics Canada; Better Dwelling.

Broken down by period of construction, the trend of higher growth for existing-homes still applies. New home prices increased 2.2% in Q4 2021 and are now up 12.8% from the previous year. In contrast, existing home prices advanced 2.2% in Q4 2021 and are now up 15.7% compared to a year before. Both segments showed three consecutive quarters of slowing.

Canadian home price growth slowed in major markets for both new and existing home sales. One would expect this with higher interest rates on the horizon, though CREA data doesn’t exactly agree. In either case, Toronto real estate is a big exception, showing price acceleration. The growth for all indexes was large, even in places where the growth was decelerating. 

4 Comments

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  • Omar 5 months ago

    Does Stats Can’t use this in CPI? Because that would explain why inflation is anemic while home prices are rising at more than 50% higher than their annual growth estimate.

  • No Comments 5 months ago

    Southern Ontario is a mess. I am eager to see the pains of investors who have invested in small towns of Southern Ontario without sufficient research. Those investors are already in a Negative Cash Flow Situation, there are not enough good tenants and there are absolute no market fundamentals to hold the price growth. Besides, just with the upcoming interest rate hikes news already the investors are almost under water. Enjoy…………

    • Scuz 5 months ago

      I sure hope you are right. What a scary mess we’ve landed ourselves in.

  • House of Gucci 5 months ago

    I hope this is “civil “. Poor people, get the hell outta here.
    Canadian Real Estate equals Father, Son, House of Gucci.

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