Vancouver and toronto drive canadian house prices up

Photo: BrianFagan

Vancouver and Toronto are driving Canadian house prices up, as the two cities continue to race ahead of the country.

The national average price for homes sold in March 2015 was $439,144, up 9.4 per cent on a year-over-year basis, according to CREA's latest report. This average, though, is being increasingly skewed by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets.

"Greater Vancouver and the GTA are really the only two hot spots for home sales and prices in Canada," comments Gregory Klump, CREA’s Chief Economist. "Price gains in these two markets are being fuelled by a shortage of single family homes for sale in the face of strong demand."

March sales were up from the previous month in nearly two-thirds of all local markets, led by Greater Vancouver, Fraser Valley, Calgary and Edmonton. Despite the monthly rebound, Calgary and Edmonton sales came in below the 10 year average for the month of March.

"Supply and demand for homes is well balanced among the vast majority of housing markets elsewhere across Canada," adds Klump.

Indeed, excluding these two markets from the calculation, the average price is a relatively more modest $332,711 and the year-over-year gain shrinks to just 2.4 per cent.

Actual (not seasonally adjusted) activity in March stood 9.5 per cent above levels reported in March 2014 and slightly above the 10 year average for the month. March sales failed to lift activity recorded during the first quarter above its 10 year average. First quarter sales were below their 10 year average in most local housing markets.

The number of newly listed homes rose 1.8 per cent in March compared to February. The rebound in Greater Toronto more than offset the continuing pullback of new supply in Calgary, where it had climbed sharply toward the end of last year but now stands at a multi-year low.

"Low mortgage interest rates are good news for affordability as we head into the spring home buying season," says CREA President Pauline Aunger. "This spring should see buyers coming off the sidelines in places where winter was anything but mild."