Photo: Kurt Bauschardt/Flickr
The Bank of Canada’s low key interest rate and the slumping Canadian Dollar are countering the negative effects of low oil prices on the housing market, a Royal LePage report released today suggests.
In the third quarter of 2015, aggregate Canadian home prices, including bungalows, two-storey homes, and condos, were up 8 per cent year-over-year to $502,643, according to Royal LePage’s National House Price Composite.
The composite, launched this month, tracks resale-home values in 53 large Canadian real estate markets. To figure out the aggregate prices, Royal LePage uses a weighted average of median home values for the regions covered.
“Economic slowdowns in energy-dependent markets, most notably in western Canada, have in part been offset by both renewed industrial activity in other parts of the country and the Bank of Canada’s recent interest rate cuts,” Phil Soper, Royal LePage’s CEO, said in a statement.
The weak Canadian dollar is also boosting the nation’s real estate market and consumer confidence as it’s encouraging a considerable increase exports to the US, according to Royal LePage.
Of the three housing types examined, two-storey homes saw the greatest year-over-year price increase.
In Q3, the price of a two-storey home was $615,304, up 9.9 per cent from the same time the year before.
Meanwhile, the price of a bungalow sat at $421,757 in Q3, a 6.8 per cent year-over-year increase, and the price of condo reached $338,945, up 2.7 per cent.
National prices are being driven up by large gains in Greater Vancouver and the Greater Toronto Area (GTA), Soper explained.
In Greater Vancouver, the aggregate price was $822,181, 12.9 per cent higher than it was in Q3 last year.
For the GTA, the aggregate price rose to $550,203, which amounts to an 11.3 per cent year-over-year improvement.
Of all markets tracked, Richmond, BC, saw the greatest increase in the aggregate home price, rising 20.2 per cent over the previous year to $722,366.
The market with the largest year-over-year decline in aggregate price was Moncton, NB. There, the aggregate price was down 4.1 per cent to $205,096, the result of falling two-storey home prices. However, the aggregate still represents a 4.4 per cent increase over Q2.
Across the board, a majority of the 53 markets surveyed, no matter how stagnant, saw the aggregate home price rise; only eight experienced declines.
“Home ownership remains a bright light amid unsettled investment and savings options in volatile global capital markets,” said Soper in the statement.