Photo: Cory Doctorow/Flickr
After periods of unsustainable house price growth in the Greater Toronto Area (GTA) and Greater Vancouver, the nation’s hottest markets are now appreciating at a healthy pace, according to Royal LePage’s House Price Survey, published today.
During the third quarter of 2017, home prices in the GTA and Greater Vancouver, along with Greater Montreal, Calgary and Ottawa all increased at rates between 1.5 and 3.5 per cent on a quarter-over-quarter basis, representing a more balanced Canadian housing market.
“The numbers, although they have moved up substantially year-over-year, the trend was towards much more moderation,” Phil Soper, Royal LePage’s President and CEO, tells BuzzBuzzNews.
The quarterly report by the real estate company provides information on the three most common housing types in Canada in 53 of the country’s largest real estate markets. The year-over-year price change data cited in the report originates from the Royal LePage’s internal House Price Composite data.
For the first time in six years, Royal LePage says the national housing market has stepped back from overheated territory and is now enjoying a “Goldilocks moment,” where the market is both not too hot and not too cold.
Although price appreciation in the Ontario’s Greater Golden Horseshoe has recently stabilized to healthier levels on a quarterly basis, last quarter the region continued to see substantial annual gains, attributed to significant price growth seen at the beginning of 2017, says Royal LePage.
Similar to the Greater Vancouver housing correction of 2016, the GTA saw a sharp drop in sales volume beginning in April — the same month the Ontario government introduced the Fair Housing Plan, which included a non-resident speculation tax.
Buyers who remained on the sidelines after the plan’s implementation have now jumped back into the market while sellers, who attempted to capitalize on spring activity, have taken their homes off the market, says Royal LePage.
In turn, these actions have caused the GTA to rebound to a more balanced market, experiencing a correction much quicker than Greater Vancouver.
“What we’re seeing… is that the market has picked up again, so it likely was a very short correction, in the neighbourhood of about a six-month correction. We anticipate a rise in both volumes and prices this fall, but not at the rate we were seeing in 2015/2016,” says Soper.
In Q3 2017, the GTA saw the largest annual price gain out of all Canadian markets, soaring roughly 22 per cent to $860,295. Meantime, the price of a home in the City of Toronto increased 21.8 per cent to $861,397.
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Hamilton and Kitchener/Waterloo/Cambridge came out on top with the biggest annual price gains in the region of 27.9 per cent and 28 per cent, respectively.
Compared to a year ago, Greater Vancouver house prices are appreciating at a much healthier pace. In August 2016, the BC government implemented a foreign-buyer tax to cool activity in the region’s housing market which resulted in an immediate slowdown. After a nearly 10-month correction, the activity in the region rebounded but last quarter prices showed manageable growth.
In Q3 2017, the aggregate price of a home in Greater Vancouver increased 2.5 per cent year-over-year to $1,229,133. During the same period, the City of Vancouver saw an uptick of 2.2 per cent to $1,439,652.
In Alberta, the province’s economy continues to emerge out of a recession. With improving oil prices and job opportunities, the housing markets are benefitting from the recovery, says Royal LePage.
Last quarter, the aggregate price of a home in Calgary rose 5 per cent year-over-year to $479,211.
Ottawa maintained its stable momentum last quarter as prices increased by 7.9 per cent year-over-year to $441,453.
According to Soper, Montreal is a market to watch out for as it’s the most affordable world-class city. In the third quarter of 2017, the aggregate price of a home increased 6.6 per cent to $384,055.
Going forward, Soper says rising interest rates and a strong Canadian dollar should stabilize price appreciation in Canada’s major markets into 2018.