RE/MAX Canada believes home prices in Toronto and Vancouver will accelerate even further this year and has increased its previous predictions for the big cities and Canada as a whole. The 2015 estimates for the GTA and Greater Vancouver Area were 4 and 3 per cent respectively, but the real estate company now expects prices to climb up 7 per cent in Toronto and 6 per cent in Vancouver.
In December, RE/MAX predicted Canada’s housing market would see price growth of about 2.5 percent in 2015, a number that has since been boosted to 3 per cent due to growth in the Toronto and Vancouver.
The changes come after a particularly strong first quarter for the cities. The average home sale price in Toronto rose to $594,827, an 8 per cent jump over the year before. In Vancouver, sale prices increased 7 per cent to $874,869.
The report pointed to low supply levels of single-family homes as one of the driving factors, noting that “in both markets, first-time buyers find themselves in competition with down-sizers and investors with more resources to outbid.”
These pricey markets are having an effect on their neighbours’ values as well. RE/MAX reported a “spillover” effect in Victoria, where prices rose 2 per cent, Hamilton-Burlington, where they increased 8 per cent and Barrie, which saw a 6 per cent boost.
It’s a striking contrast to oil-producing provinces. Sales were down in both Calgary and Edmonton, while inventory levels crept upward. Calgary recorded a 2 per cent decline in home sale prices in Q1-2015, while Edmonton saw a 2 per cent increase.
“Albertans are waiting to see the long-term effect of oil prices in the region before making their purchase while sellers are holding out on price. This is creating higher than typical inventory levels,” said Elton Ash, Regional Executive Vice President at RE/MAX of Western Canada.
“As the price of oil stabilizes, so too should the housing markets in Calgary and Edmonton.”