Canadian home prices rose 6.2% year-over-year in the first quarter of 2018, according to a Royal LePage House Price Survey released Friday. But the quarterly comparison shows a slightly less rosy picture, with prices for homes around Canada remaining flat or seeing small dips in prices, according to the survey.
The average price of a home in Canada was C$605,512 (US$480,401) in the first quarter, according to the report, which is compiled from data from 63 of the nation’s largest real estate markets. Condominiums saw the biggest rise of 10.3% to C$418,245 (US$331,827), while the median price of a two-story home rose 5.7% year-over-year to C$715,726 (US$567,845) and bungalows climbed 4.5% to C$501,985 (US$398,264).
The report didn’t look at luxury numbers separately.
Tighter lending as a result of government actions and higher prices factored into the decline in prices in Canada, according to the report.
“We are experiencing a broad-based, residential housing correction in Canada, triggered by
federal and provincial intervention,” the president and CEO of Royal LePage, Phil Soper, said in the report. “Strong house price gains in the first half of 2017 mask some of the recent market shifts when comparing year-over-year home value trends.”
New mortgage rules were put into effect in January, so potential borrowers are now subject to increased scrutiny to make sure they can keep up with their payments if interest rates rise, the Royal LePage report said.
Meanwhile, March saw a 22.7% drop in the number of homes sold, according to a separate report from the Canadian Real Estate Association on Friday. That’s the lowest number in four years, the group said, and 7% below the 10-year average. Additionally, average home prices were down 10.4% from the same month last year, according to the association.
Toronto Turns in Favor of Buyers
Sluggish sales activity and slowing price gains in the Greater Toronto Area contributed to the first-quarter dip in the national market, said Royal LePage. In a separate report, aggregate price of a home in the Greater Toronto Area decreased 2.2% quarter-over-quarter, with two-story homes down 2.4% and bungalows down 2.1%. Even condominiums dipped 1.3%, quarter-over-quarter.
Year-over-year, home prices grew 3.1% in Toronto to C$802,252 (US$636,490), with all types of housing seeing gains. But those increases are small compared to the previous year, when the area saw increased sales and prices.
“After a prolonged period of a heightened seller’s market, potential homebuyers across the Greater Toronto Area are finally seeing a window of relief,” the COO of Royal LePage Real Estate Services Limited, Kevin Somers, said in the report. “Despite recent sluggishness in
real estate…demand for entry-level property is still extremely strong, and properly priced property continues to trade hands.”
From Penta: Easing Through the Northwest Passage
Vancouver Sees Low Inventory, Increased Prices
In Vancouver, limited supply means prices on the whole are up, according to a separate report by Royal LePage, rising 10.3% year-over-year to C$1.3 million (US$1 million). Condominiums were up 19.8% year-over-year to $668,342, while the median price of a bungalow grew 6.2% year-over-year to $1.4 million (US$1.1 million). Two-story home prices grew 9.6% year-over-year to $1.6 million (US$1.2 million).
“Greater Vancouver’s real estate market continues to be defined by low supply levels,” Randy Ryalls, general manager of Royal LePage Sterling Realty, wrote in the report. “The only way that we can create a healthy and sustainable market is by increasing the amount of available inventory across the region.”
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