Vancouver and toronto drive canadian house price growth

Vancouver and Toronto continue to drive Canadian house price growth to a striking degree.

The national average price for homes sold in January 2016 was $470,297, up 17 per cent year-on-year, according to the Canadian Real Estate Association. However, the average is significantly distorted by thriving sales activity in Greater Vancouver and Greater Toronto. If both are excluded, the average house price in Canada is a more modest $338,392 and the year-over-year gain is reduced to 8 per cent.

Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and the Lower Mainland of British Columbia versus flat or declining average prices elsewhere; if British Columbia and Ontario are excluded from calculations, the average price slips even lower to $286,911, representing a decline of 0.3 per cent year-over-year.

The number of homes trading hands via MLS Systems of Canadian real estate Boards and Associations edged up by 0.5 per cent in January 2016 compared to December of last year. The monthly increase lifted national sales activity to the highest level since late 2009. These are concentrated in the GTA and Lower Mainland of British Columbia, though, with monthly sales declines recorded in Calgary, Edmonton and the Okanagan Region.

"January 2016 picked up where 2015 left off, with single family homes in the GTA and Greater Vancouver in short supply amid strong demand standing in contrast to sidelined home buyers and ample supply in a number of Alberta housing markets," says Gregory Klump, CREA’s Chief Economist. "Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead."

According to the Aggregate Composite MLS House Price Index, Greater Vancouver led growth with a price rise of 20.56 per cent, ahead of the Fraser Valley (16.94 per cent) and the GTA (10.69 per cent).

Home prices in Victoria posted a year-over-year gain of just over 7 per cent while Vancouver Island home prices rose 5.5 per cent. By contrast, home prices retreated 3 per cent on a year-over-year basis in Calgary, 2 per cent in Saskatoon, and less than 1 per cent in Regina.