Average Ontario home prices have risen 17 per cent over the past four years, with the most significant growth seen in the province's north, according to a report released Tuesday.
The Municipal Property Assessment Corporation, which tracked home sale prices in Ontario between Jan. 1, 2008 and Jan. 1, 2012, said the figures are good news for Ontario homeowners as they suggest a strong real estate market.
"Increasing property values reflect positive economic circumstances," said MPAC's chief assessor Larry Hummel.
However, rising home prices make it difficult for first-time homebuyers to enter the market, and many in some of Ontario's most expensive cities like Toronto are opting for condos, a market that many economists have warned could soon be at risk of a downturn.
The figures reflect average price trends in local markets, which can vary greatly from one another.
To illustrate the 17 per cent average provincial increase, the report said if a property sold for $350,000 on Jan. 1, 2008, the average sale price for that same property on Jan. 1, 2012 would be $409,500.
"This is a reflection of obviously a lot of sale data," Hummel said of the report's figures.
Mining industry driving development
The report noted some of the most significant growth in Ottawa and in cities in northern Ontario.
The country's capital saw home prices rise 24 per cent over the last few years, according to the report, which notes the city has a stable and fairly diverse economy which contributes to a steady increase in prices.
Meanwhile, in northern Ontario, the report found a 29 per cent jump in home prices in the Timmins area, a 25 per cent increase in the Sault Ste. Marie area and a 19 per cent rise in sale prices in the Sudbury area.
Higher resource prices which contributed to a mining boom and the diversification of local economies are behind the price increases in the north, said Hummel.
Population increases related to the mining industry have been driving infrastructure development and have had a ripple effect on the real estate market, he said.
"The north is coming off a very low base," he said. "Their house prices — up until this last five- or six-year period — were very low relative to the rest of Ontario."
Those home prices are still comparatively lower than those found in southern Ontario, the report notes. In Sault Ste. Marie for example, an 1,100-square foot bungalow sold for an average of $152,616 in 2011.
Home price assessments coming
Further south, the report found average home sale prices in Toronto jumped 23 per cent over the four-year period.
Other municipalities saw more modest increases, with home prices in London rising seven per cent and those in Barrie increasing six per cent over the same four-year period.
MPAC analyzed actual sale prices of similar properties to help establish the assessed value of residential properties. The location, quality of construction, lot dimensions, any renovations or additions, as well as number of bathrooms were some of the factors that played into a property's assessment.
The report released Monday was MPAC's first such document on residential sale price trends, which Hummel said is laying a foundation for a home price assessment update later this year.
One of MPAC's goals with the report was to take the temperature of the Ontario real estate market so homeowners are better informed.
"We want to give them a sense of where the price for their home is heading," said Hummel. "We wanted to make people aware of what is going to happen in the marketplace."
Canada's real estate market is showing signs of cooling off following a post-recession boom sparked by a move to ultra-low interest rates. Both national home sales and the average home price were down year-over-year last month, indicators that the national market could be slowing.
The national average home price in June was $369,339, down 0.8 per cent from the same month last year, the Canadian Real Estate Association said. But prices increased in Calgary, remained strong in Toronto and continued to slow in Vancouver.