Photo: alyssa BLACK./Flickr
Canadian home prices are stabilizing, and that’s in part thanks to the recent performance of Toronto’s condo market, which is expected to see continued price growth in the coming months.
According to the Teranet-National Bank House Price Index, Canadian home prices were roughly flat in April, and remained 1.24 percent up from year-ago levels. Prices are still 1.8 percent below the September 2018 peak.
But although the index, a popular gauge of price performance across 11 major markets, has not risen in seven months, that stagnant stretch has only shaved 1.8 percent off home prices.
“The moderation of the recent price decline at the national level is partly due to Toronto,” writes Marc Pinsonneault, a National Bank senior economist.
Over that same seven-month period, Toronto prices were left a mere 0.2 percent lower, with the condo market cushioning the blow. Condo prices have climbed 2.1 percent since October 2018, while prices for all other dwellings, including detached houses, were down 1.3 percent.
“[M]arket conditions on the condo market have been tight over the last three years, suggesting that the upward trend in condo prices in Toronto is unlikely to be interrupted in the near future,” Pinsonneault continues.
Some 2,357 condos changed hands in the Greater Toronto Area last month, up 6.7 percent from April 2018, according to the Toronto Real Estate Board.
While stress testing continues to set a higher bar to homeownership across Canada, homebuyers in Toronto have been purchasing cheaper homes, and that bodes well for sales activity for condos, the most affordable housing type.
“Even though the Central Bank’s policy rate remained unchanged, keeping mortgage rates flat — buyers are remaining prudent and buying less expensive homes as evidenced by the meek average price growth this month,” notes Edgard Navarrete, a regional economist for Central 1 Credit Union, in a separate report on the latest TREB numbers.
“Given the economic uncer- tainty on the horizon, especially now that the U.S. and China trade spat is possibly ramping up, consumers are acting accordingly careful,” he concludes.