Canadian Real Estate Prices Are Up Over 44% Over The Past 5 Years

Canadian real estate prices are slowing in growth, but they made a wild run over the past few years. Canadian Real Estate Association (CREA) numbers show price growth made a huge deceleration into October. Price growth is now close to target inflation, but over the past 5 years they’ve increased by over 44%. Not just in Toronto or Vancouver, but that’s the national average.

Canadian Real Estate Prices Increased Over 44% In 5 Years

The price of a typical home across Canada is falling from peaks, but has a long way to go to normalize. CREA reported the benchmark across Canada reached $623,000 in October, down 0.13% from the month before. Prices are now up 2.33% from last year, and up an absurd 44.04% over the past 5 years. The aggregate number is adjusted for volume by region, and housing type. This isn’t just Toronto or Vancouver, that’s the national number.

Canadian Real Estate Benchmark Change

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

Source: CREA, Better Dwelling.

After making such huge gains, price growth is tapering to much lower levels. The annual gains of 2.33% in October is higher than the month before, but way below the 9.1% we saw last year. The mild gain more likely has to do with how quickly the benchmark decelerated last year.

Vancouver Real Estate Is Still The Most Expensive In The Country

Vancouver real estate may be slowing in growth, but it’s still the most expensive market in the country. Vancouver’s benchmark reached $1,062,100 in October, up 1.03% from last year. Oakville, an affluent suburb of Toronto, reached $958,700, up 2.19% from the same month last year. Fraser Valley, a board so close to Vancouver agents often do both markets, reached $853,600, up 6.84% from last year. Worth also noting that British Columbian real estate markets are seeing huge declines in sales right now.

Canadian Real Estate Benchmark Price

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

Source: CREA, Better Dwelling.

There are some urban real estate markets that aren’t all that expensive… in contrast. Moncton is the cheapest city in CREA with the benchmark reaching $182,600 in October, up 4.16% from last year. Regina came in second at $277,100, down 3.6% from the same month last year. Saskatoon came in third with $295,100, down 0.86% from last year. These markets seem relatively inexpensive in contrast to the rest of Canada. However, that might be more of a statement on Canadian home prices, instead of representing a “deal.”

Guelph, Victoria, and Fraser Valley Real Estate Lead Higher

A commuter region for Toronto, and two BC markets are this year’s fastest moving markets. Guelph reached $562,300 in October, up 9.33% from last year. Victoria came in second with its benchmark reaching $693,600, up 8.5% from last year. Fraser Valley made an appearance once again with their benchmark at $853,600, up 6.84% from last year. Canadian Robert Shiller fans could have guessed this one.

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.

Real Estate In The Canadian Prairies Is Dropping

The Canadian prairies are leading the market lower. Regina saw the biggest drop, with the benchmark falling to $277,100 in October, down 3.6% from the same month last year. Calgary followed with a benchmark of $422,000, down 2.61% from last year. Edmonton’s benchmark came in at $324,000, down 2.42% from last year. The prairies are a large part of why the Bank of Canada cut interest rates in 2015. The boost, that sent the rest of the country into overdrive, likely propped up values over the past few years.

Absurd Gains Made In Toronto and Vancouver Real Estate Suburbs

If you thought Toronto and Vancouver made big gains over the past few years, you should see their suburbs. Fraser Valley was the best performing market with its $853,600 benchmark in October, up 87.84% over the past 5 years. Niagara reached $389,200 in October, up 76.12% over the past 5 years. Vancouver came in third with $1,062,100, up 73.28% over the past 5 years. For those curious, Toronto came in sixth with a benchmark of $766,300, up 60.08% 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.

The worst performing real estate markets were all in the Canadian prairies. Regina’s benchmark fell to $277,100 in October, down 8.89% over the past 5 years. Saskatoon fell to $295,100, down 5.96% over 5 years. Edmonton came in third at $324,000, down 0.16% over the past 5 years. Montreal fits closest to this category, with a benchmark of $350,000 in October, up only 17% over the past 5 years. Remember, prices are up 44% across the country. That said, it shouldn’t be too surprising Montreal has been outperforming the market recently.

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  • SCE 5 years ago

    Probably continues to go higher as well!!

    Builders blame Ontario’s growth plan for rising home prices

    • Prof Rob 5 years ago

      You’re getting the wrong takeaway. It’s more indicative of a credit excess, which is further demonstrated by the rise in private lending. Eliminating credit slack results in late-trend participants to seek alternative credit sources.

      Think the US flock to subprime, after interest rates increased. The people that went to subprime weren’t “subprime” by credit score, they needed more credit to participate. Banks manage their risk this way, because they know a gentle breeze brings the market back to reality.

      There’s a lot of papers written on the topic. Do Canadian not have access to US academic journals? Because it seems like they haven’t learned a thing over the past 30 global housing bubbles. Of course, it’s different in Canada. Blah, blah, running out of land, too much immigration, everything that’s repeated during every bubble.

      • Trevor 5 years ago

        There’s no point in addressing SCE. They’re just some real estate troll, that thinks saying prices always go up is logical. As if that’s logical reasoning for anyone.

      • Ian 5 years ago

        You can tell Troll Nation when it comes out. Builders blame environmental protection. Nothing about the fact that builders are failing financing at traditional lenders, and are starting to go to private lenders, raising their cost basis almost 300% on the loan. But yeah, the environment! Damn them!

        We should blame foreign buyers too, because they forced us to absorb homes at an 80% price increase. Argggggh! Everyone but us are to blame!

      • TrollAppreciator 5 years ago

        I don’t think you get it man…it’s different this time

    • SUMSKILLZ 5 years ago

      Builders like to lock up land for later. Decades can go by between purchase and development. The Greenbelt messes up that equation as there are no large tracks left to buy on the cheap to squirrel away for later. Their long game is in peril. They’re understandably upset.

  • Trevor 5 years ago

    Now for the rush of real estate agents that don’t understand what decelerating growth means. Of course, the best performing markets are the ones you should always pile into… said no one ever. 😂😂😂

    • someguy 5 years ago

      “said no one ever”???

      Said lots of people.

  • Mica 5 years ago

    Someone explain the Robert Shiller reference for use plebes? Thanks

    • Poki 5 years ago

      Shiller is a Yale prof that demonstrated that most bubbles aren’t related to the house itself, but the land that’s under it. The mispricing of land is almost always where a bubble is, and spreads quickly – especially to rural and farming areas. All of a sudden people in the suburbs are saying the city will expand into their region, because it’s only natural.

      They’re speculating that the city will survive a bubble, and expand into the area eventually. The premium they pay today, is marked as a forward premium on future value. It’s like buying a tech stock at a price to earnings ratio of 120. Sure, it’s rich today, but you’re hoping that they grow into that revnue. I read something that said 9 out of every 10 tech companies evaluated like this fail. Take what you will from it.

  • Raging Ranter 5 years ago

    Why does Winnipeg get no mention on the charts when many smaller cities are featured?

    • Realtor Dan 5 years ago

      Winnipeg doesn’t do an HPI, so you can’t make a direct comparison. Manitoba also has a private registry that makes it an expensive nightmare to analyze.

  • SUMSKILLZ 5 years ago

    In regards to, “Montreal fits closest to this category, with a benchmark of $350,000 in October, up only 17% over the past 5 years.”

    Humm, what I find odd about Montreal is that the price appreciation is very uneven geographically speaking (I’v been assisting family elders who are downsizing), unlike say the GTA where anything with a title, walls, roof, doors and windows, jumped up in price until 2017. Same rates, same easy credit, completely different results. Why did Montreal avoid the mania?

    • River Boat Sam 5 years ago

      Because the real estate cartel moves in packs? Banks, and developers ignored Montreal over the past few years. First Calgary, then Vancouver, then Toronto, then Montreal. Watch some of the big brokers, and how they focused their reports on each market, one st a time.

      Montreal condos are even getting glitzy sales events in Toronto, to attract more development money.

      Remember, a foreign buyer doesn’t want a house. They’re sold it as a 3-5 year investment to flip to locals. If you have any doubts about that, try digging up a prospectus from any of the developers over the year to investors.

  • Oakville Rob 5 years ago

    Rationalizations and predictions are speculation. The fact remains that it’s only worth what you can sell it for on the day that you sell it.

    • Cassius King 5 years ago

      That’s the fact Jack. All the rest is just chin music

  • Cliff Ross 5 years ago

    These types of stories about long-term price appreciation fuel a misunderstanding about what’s happening RIGHT NOW in real estate. And it’s nowhere near as rosy a picture. Consider the Fraser Valley. Anyone can go to the Fraser Valley Real Estate Board’s website and look at the stats. And look at the median prices, which are real time, compared to the HPI Benchmark, which relies on three to six month old data and really obscures the picture. Since April 2018, the median price in the entire Fraser Valley has dropped from 981K to 920K (over 6 percent). It’s similar for townhouses, which have dropped from $595K to $550K, and also apartment condos, which have dropped from $400K to $380K. Anyone considering buying needs to know what the market is doing right now (dropping rapidly), not what it’s done in the last five years.

    • Trader Jim 5 years ago

      No, broke people just don’t understand what the takeaway is.

      You sell your best performing assets, and buy underperforming assets with strong fundamentals. If this was a trade, you’re supposed to sell Vancouver and buy Montreal. Both have strong population movements, and but one has future value already priced in while the other does not.

      Past appreciation doesn’t mean future appreciation. Middle class people don’t understand this. If you do, you’re a bitcoin buyer at $19,000.

  • TrollAppreciator 5 years ago

    No one here gets it. Your analysis is useless. You don’t seem to understand, Canada is the next Rome! Toronto is a world class city. We have Kawhi Leonard on the Raptors now. We’re only gonna get 15 feet of snow this year instead of the regular 30 a day. Canada is great. You’ll see, as global warming continues it’ll be the only liveable country in the world.

  • Oakville Rob 5 years ago

    I would be interested in the real estate value change over the same period of time compared to similar international cities – like Los Angeles, Berlin, Madrid, Houston, Chicago…are we all in the same boat or did Canada experience something unique?

    • Oakville Rob 5 years ago

      I meant did the GTA experience something unique?

    • CupaJoe 5 years ago

      Your not in the same boat. What happened in Toronto and Vancouver was the result of people looking for assets to generate more yield than the near 0% interest rates that most of the central banks were offering. All it takes is a small amount of foreign investors to inflate prices. The real estate markets were just another asset class, like equities, bonds, art, cryptocurrencies, etc. There were increases in prices in NYC, San Fran, Australia, London, New Zealand, and so on. All these places are seeing price declines, esp. at the high end. (50 million empty properties in China too.) There are many factors why, but increases in interest rates, unaffordability, adjustments in regulations, increases in supply, and an overall reduction in liquidity has contributed to this.

      This is pure and simple a bubble that peaked in first quarter of 2017. Since then we have had price fluctuations and changes, that some real estate agents try and market as a minor blimp as prices are “about to rip higher”.

      Always remember this.. US housing bubble of last decade peaked in Q1 of 2006. Over two years, prices fluctuated in various markets. By end of Q1 of 2008, US was in a full blown housing meltdown, that with a lot of financial derivatives (MBS, CDOs, CDS), took down the global financial markets. Two years from peak to crisis. In between people thought everything was fine, and people were still buying homes at high prices.

      2 Years: 2017-Q1 to 2019 -Q1 . Buckle up, 2019 will be very interesting!

  • Perry Hermanson 5 years ago

    Thanks Better Dwelling for the update on prairies! 🙂

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