February was a relatively cool month for the Canadian housing market, as sales continued to soften in light of a new mortgage stress test. But not every market reacted to the test in the same way — in fact, some cities saw serious price gains last month.
Why did some areas react to the new policy differently than others? BuzzBuzzNews has rounded up the latest commentary from industry experts to explain.
Ottawa continues to heat up
Ottawa has been named a market to watch by many industry experts, and a drop in listings last month had many predicting that prices will heat up in the near future.
“Right now just about every agent in the city has somebody looking to buy, but we can’t find what they’re looking for because our inventories are low,” writes Ottawa Real Estate Board (OREB) president Ralph Shaw, in a statement.
According to the OREB, February saw listings for single detached homes drop by 21 per cent, while condo listings were down 26 per cent.
The trend is already starting to manifest in higher housing prices. The benchmark price for a single detached home jumped 8.5 per cent year-over-year to $409,200 in February, while the price of a condo rose 5.6 per cent to $237,200.
“We have a lot of people right now that really want to buy property, but the listings just aren’t there,” Ottawa-based real estate agent Paul Rushforth told BuzzBuzzNews.
Toronto isn’t the only Ontario market to watch
Forget Toronto — a new report from the Real Estate Investment Network (REIN) is predicting that Ottawa, Kitchener-Waterloo, Hamilton, Barrie and Brampton are the Ontario markets to watch in the next five years.
“On January 25, an agreement was signed to redevelop LeBreton Flats, prime land close to the downtown core of Ottawa,” reads the report. “The plan includes a new LRT station and will move Ottawa’s hockey team to a new home. It is expected that the plan will have a strong positive effect on demand and values.”
Meanwhile, Barrie is described as being poised for “inevitable growth,” and Brampton is noted as being “strategically located” close to Toronto, while offering more affordable housing prices.
“Notably, Ontario’s Greater Golden Horseshoe is one of the fastest growing regions in North America, expecting to grow 13.5 million people and 6.3 million jobs in the next 23 years,” reads the report.
Vancouver’s prices are headed skywards
Vancouver’s housing market is only getting hotter, with the benchmark price of a home rising 17 per cent year-over-year to $1,071,800 in February.
“The sales-to-new listings ratio, which is usually a pretty good gauge of tensions in the market shows that sellers continue to have the upper hand in setting prices,” RBC senior economist Robert Hogue told BuzzBuzzNews.
Hogue expects that the condo segment will do particularly well in the next few months, due to its relative affordability. He also adds that if interest rates continue to rise this year, Metro Vancouver’s housing affordability challenges “will become even more acute.”