Photo: Darryl Braaten/Flickr
Following CREA’s report that national home sales fell two per cent year-over-year in January, BMO has declared that no regions are sellers’ markets, though Vancouver and Toronto — where prices continue to climb — come close.
Outside of those two cities the bank says home values “appear reasonable,” but still-rapid price gains in The Big Smoke and Lotus Land “raise the odds of a correction if economic conditions turn for the worse.”
The national benchmark price rose 5.2 per cent year-over-year in January, largely due to strong gains in Vancouver (where the benchmark price climbed 5.5 per cent) and Toronto (up 7.5 per cent). In both cities, BMO says demand is strong and inventory levels are lean.
Still, BMO expects home values in those regions to prop up price growth across the country in 2015.
“National house prices are expected to rise two per cent in 2015, with weakness in Alberta partly offset by further gains in Toronto and Vancouver,” the bank wrote in its report, before predicting that rising interest rates in 2016 will restrain prices in the two cities.
In the meantime, Vancouver and Toronto remain at the top of the list of Canada’s least affordable housing markets. In fact, if you were to remove those regions from the equation, the per cent of income the average household has to commit in order to be able to afford a home falls from 36 per cent to 28 per cent.
And while Toronto posted larger price gains in the month of January, Vancouver easily retained its title of the country’s most expensive housing market. Indeed, making a median income, the average Vancouver household now has to commit 98 per cent of their income to be able to afford mortgage payments on a single-family home.
For more, the complete report can be found here.