Canada’s housing market continues to set new records, with the average sale price up to $508,097 in April, the busiest month for home sales in Canadian history.
The Canadian Real Estate Association says the average house price increased by more than 13 per cent in the year ended in April.
CREA has said for several months in a row that the average price is skewed higher by the hot and large markets of Toronto and Vancouver. Stripping those two cities out, the national average drops to $369,222 and the year-over-year gain is reduced to 8.7 per cent, CREA said.
CREA says the average figure is misleading, so it calculates something it calls the Aggregate Composite MLS House Price Index, and contends it’s a fairer representation of the real market, by blending together all housing types.
Even on that more normalizing scale, the CREA index rose 10.3 per cent in April, its biggest gain in almost six years stretching back to May 2010.
Here are the eye-popping numbers for some areas in and around Toronto and Vancouver:
– The Greater Vancouver Area’s index increased by 25.3 per cent
– The nearby Fraser Valley increased by 25.6 per cent
– Prices in the GTA were up by 12.6 per cent
– Victoria was up 12 per cent
– Vancouver Island prices were up by 8.2 per cent.
By way of contrast, prices declined by 3.5 per cent and 2.4 per cent in Calgary and Saskatoon, respectively, which are smaller declines than those posted by these markets in March.
But it’s not just prices that are spiralling. Sales volume was also red hot, with 70 per cent of all markets showing gains. Two notable exceptions were Toronto and Vancouver, where new mortgage rules implemented in February appear to have slowed down the selling frenzy. In Toronto, the April sales figure was flat compared to March. In Vancouver, it declined by one per cent. But prices were still sky high in both places due to limited supply.
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And Toronto and Vancouver are the exception to the rule as the national sales figure rose to its highest level ever in April.
Houses are selling so fast on a national basis that inventory has been pushed to its lowest level in more than six years, at 4.7. (That number represents how long it would take, in months, at the current sales pace to sell all the houses currently on the market.)
Bank of Montreal economist Robert Kavcic said Monday that the large national figure masks wide regional variances across the country.
“Of the 26 major regions covered, six saw double-digit average price gains in April, 10 saw outright declines, while the median city was running at 1.4 per cent,” Kavcic said.
“It’s business as usual in Canada’s housing market, with extreme strength in Toronto and Vancouver, corrections playing out in the oil-exposed markets, while most others fall somewhere in between. With supply in the two hot markets extremely tight, and policymakers barely testing the water, prices are likely to push even higher through the rest of this year.”