Western Canadian Real Estate Prices Just Won’t Rise

Canadian real estate prices are moving the most in over a year – which doesn’t say much. Canadian Real Estate Association (CREA) data shows the price of a typical home increased in November. Most of the index gains were from markets east of Toronto, which are booming after a slow few years. The drag on the index was located exclusively West of Toronto, where markets are mostly spiraling lower.

Canadian Real Estate Prices Rise Less Than 3%

Canadian real estate prices are moving higher, driven by movements in Eastern Canada. The typical price of a home reached $638,300 in November, up 2.55% from last year. The rise in prices are coming in just a clip above inflation, which CPI printed at 2.4% in the latest numbers. Last month’s 12-month increase is also the highest observed since August 2018. Not huge growth, but the highest in a long time.

Canadian Real Estate Benchmark Change

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

Source: CREA, Better Dwelling.

Biggest Gains Are In Southern Ontario and Quebec

The Southern Ontario-Quebec corridor is seeing the biggest price gains from last year. Ottawa saw the biggest gains with a typical home hitting $443,500 in November, up 11.45% from last year. Montreal followed with prices hitting $380,000, up 8.72% from last year. Niagara came in third with prices hitting $431,200, up 7.99% from last year.

Canadian Real Estate Benchmark Price

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

Source: CREA, Better Dwelling.

Western Canadian Real Estate Markets Are The Biggest Losers

The biggest drop in prices are exclusively in Western Canada. The City of Regina made the biggest drop to $260,600 in November, down 5.52% from last year. Vancouver followed with prices hitting $1,002,700, down 4.59% from last year. Fraser Valley came in third with prices at $826,900, down 3.1% from last year.

Canadian Real Estate Price Change – 1 Year

The 1 year percent change in the seasonally adjusted price of a typical home, in Canada’s largest markets.

Source: CREA, Better Dwelling.

Most Eastern Canadian Real Estate Markets Hit New “Peaks”

Most of Canada’s large markets are now at peak prices, when they’re seasonally adjusted. Ottawa, Montreal, Niagara, Hamilton-Burlington, Toronto, Guelph, and Victoria all reached a new peak. Some segments, such as detached units, are not printing new all-time highs. Also worth a mention is many of these markets are not at all-time highs for average sales prices.

Markets Furthest From Peak Are All In Western Canada

Western Canadian real estate markets are furthest away from the peak. Regina, uh… bottom’s the list, with a typical home at  $260,600 in November, down 15.72% from peak. Edmonton follows with prices falling to $319,400, down 14.55% from peak. Calgary’s typical home price comes in third at $414,200, down 10.09% from peak. All of these markets haven’t seen peak in a few years, and were left out of the recent national price rally.

Canadian Real Estate Price Change From Peak

The percent change from seasonally adjusted peak pricing for a typical home in Canada’s largest markets.

Source: CREA, Better Dwelling.

Canadian real estate prices are back to rising, but growth is still low as an aggregate. Breaking it down regionally, we can see that Eastern Canada is seeing prices boom. This is especially true in markets that didn’t see a big jump during the national rally – such as Ottawa and Montreal. In Western Canada, things are still mostly in the dumper – accounting for most of the drag on the index. Yes, dumper is a technical term.

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  • Kathleen Thomson 4 years ago

    The only way to save the market of digit growth and record sales, is for the government to give people money to buy houses.

    Sound like a dumb idea? Then why is that what the government is doing?

  • Ken Wu 4 years ago

    Even BC Assessments is marking Vancouver prices down more than 5%. Truth is more like 20% when factoring in apples to apples, rather than using averages.

    • Ken Wu 4 years ago

      Vancouver has no issues with double digit growth or record sales, all good. And Toronto will soon join Vancouver in 2020.

  • Joseph 4 years ago

    Further proof we are deep in a bubble.

    People are driving up prices in Ottawa, the city that fun forgot.

    This should be a poor man’s rule of thumb. The easiest way to tell you’re truly in a bubble that’s about to burst.

    Wait until all those people who migrated (if indeed that’s what’s happened instead of investors simply picking up all the properties and banking on the “below average” house prices from 2 1/2 years ago) realize just how boring it is. Houses on the market will be through the roof.

    • vnm 4 years ago

      Haha! It also feels even colder than measured on a thermometer, which is plenty cold.
      Whether it’s the dampness or psychological, it’s palpable. A friend of mine
      said he’d never lived a colder place in his life, and he grew up in Labrador.

      Bubble, what bubble, speaking of out of kilter indicators, this is from a 2017 article in FP, There may well be a reasonable explanation for this, the economist who post here (thanks btw) might know, but along with not including housing costs with respect to inflation, there appears be a huge disconnect between the numbers and reality.

      “StatsCan’s New Housing Price Index, which forms parts of the agency’s estimate of shelter costs, registered virtually no change for the Vancouver market since 2008.
      There has been a cumulative increase of only 37 per cent for the Toronto NHPI since 2008 (vs. 118 per cent according to resale market data),”
      They also noted rent inflation averages near a record low of one per cent in Toronto, Montreal and Vancouver.”

    • bee bop 4 years ago

      It’s not a bubble. Canada has a welcoming visa policy for smart people. Trump has closed these visas in the US. Microsoft, Google and Amazon now have huge offices in Vancouver because they can recruit talent globally very easily. The trend will continue for the foreseeable future. 2019 has seen record migration to Canada https://www.cicnews.com/2019/12/immigration-helped-drive-record-population-growth-in-third-quarter-of-2019-1213387.html#gs.nkesic

  • Kim 4 years ago

    Low stress level is going to drive up sales in 2020 after Feb in certain market areas, but Vancouver is going to get hit hard by the massive condo supplies from all the presales. It’s essentially going to flood the market with thousands of condos. Single detached house is the way to go for long-term investment.
    Also, Vancouver jacked property tax by 10%; it’s a sell market in 2020.

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