Canadian real estate prices are making huge leaps higher, and not just in big cities. Canadian Real Estate Association (CREA) data shows prices hit a record in February. Rapid price growth is nothing new, but where it’s occurring is. Big cities, that typically lead the market, are seeing prices rise quickly. However, it’s nothing compared to the growth in Canada’s small towns.
Canadian Real Estate Prices Rise Over $22k In A Month
A typical home in Canada, known as the benchmark, is rising much faster than incomes. The national benchmark reached $698,500 in February, up 3.35% ($22,641) from the month before. Compared to the same month a year before, prices are now 17.02% ($101,593) higher. Last month, banks warned home prices were beginning to rise faster than household incomes. Now they’ve cleared that barrier by a country mile.
Canadian Real Estate Monthly Price ChangeThe monthly change in price for a benchmark home in Canadian dollars in February 2021. Source: CREA, Better Dwelling.
Small Towns In Southern Ontario Lead Growth
Most of the biggest monthly gains were in Southern, Ontario, but a maritime city topped the list. Moncton saw the largest percent increase, with a benchmark price of $251,000 in February. This was up 6.1% ($14,431) from the month before. Barrie was in second at $678,100, up 6.05% ($38,685) over the same period. Hamilton’s in third with a benchmark of $831,400, up 5.67% ($44,611) from a month before. The last one also tops the list of growth by sheer dollar amount for the month.
Only One Canadian Real Estate Market Saw A Loss
Only one real estate market saw a decline, and it also happens to be in the Maritimes. St. John’s, Newfoundland saw the benchmark fall to $265,200 in February, down 1.52% ($4,093) from a month before. The market did manage to squeeze out a gain of 2.73% ($7,048) from the same month a year before. That also makes it the slowest moving growth on an annual basis. To be clear, that’s a healthy amount of growth for home prices. It may be problematic when it’s the slowest growth.
Biggest Annual Price Gains In Southern Ontario
Small towns in Southern Ontario saw the biggest annual percent gains. Tillsonburg’s benchmark reached $476,000 in February, up 39.79% ($135,489) from the same month last year – the biggest gain of any market. Lakelands was in second, with a benchmark of $513,800, up 37.11% ($139,064) over the same period. Woodstock came in third, with a benchmark of $520,400, up 36.49% ($139,127) from a year before. If you’re from BC and have never heard of any of those places, don’t worry. Most people from Toronto probably couldn’t find them on an unmarked map. Yet, at least.
Canadian Real Estate 12-Month Price ChangeThe 12-month change in price for a benchmark home in Canadian dollars in February 2021. Source: CREA, Better Dwelling.
Toronto Real Estate Is The 15th Fastest Growing Market
Toronto isn’t on either end of the price spectrum for once. The benchmark price reached $973,100 in February, up 3.41% ($32,088) from a month before. Compared to a year before, prices are 14.72% ($124,861) higher. The city ranks as the 4th fastest growing for prices on a monthly basis, and 15th on an annual. Prices are growing extremely fast, it just seems slow in the context of the rest of Canada’s markets.
Vancouver Real Estate Ranks 36th For Price Growth
Greater Vancouver real estate was much closer to the bottom of growth, but still not at an extreme. The benchmark price reached $1,089,300 in February, up 1.66% ($17,787) from a month before. Compared to the same month last year, prices are 6.9% ($70,310) higher. The market ranks 33rd for the monthly percentage increase, and 36th for annual. Ranking near the bottom doesn’t quite give justice to how big these increases are. These are rapid price gains, just low compared to the rest of Canada right now.
Canadian real estate prices increased at one of the fastest paces ever, and it didn’t matter where. On average, a typical home made a monthly increase over 3x higher than incomes. Regardless of low interest rates and a lack of inventory, this is difficult to see persisting for long. BMO recently warned if prices increase at last month’s pace, it would be a classic bubble by next year. What if they rise even faster than last month?
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