Average house prices up 3.5% in past year, worth $519,521 in February
Price rises driven by Toronto, Vancouver markets, according to CREA
The price of the average Canadian home ticked up by 3.5 per cent to $519,521 in February, even as the national figures continue to be skewed by hot activity in the country's biggest market: Toronto.
The Canadian Real Estate Association, which represents realtors, reported Wednesday that the average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada's tightest, most active and expensive housing markets.
"That said, Greater Vancouver's share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price," CREA said.
If the two cities are stripped out, the value of the typical Canadian home would drop by more than $150,000 to $369,728.
February is not typically a popular month for home sales, but sales were up in 70 per cent of all markets from January's level, CREA said.
And as was the case with prices, "the national increase was overwhelmingly driven by an increase in activity across the Greater Toronto Area (GTA) and environs," CREA said.
Homes are selling briskly in the Toronto area, but that's not the case in the rest of the country, where competition among potential buyers is less intense, so listings take longer to sell.
"In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings," CREA's chief economist Gregory Klump said. "As a result, they aren't putting their current home on the market. It's something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up homebuyers alike."
Prices up 23% in GTA
The market is so out of whack in the Golden Horseshoe area stretching from just east of Toronto and southwest toward Hamilton and beyond that the imbalance between supply and demand is "without precedent," CREA said.
CREA says the average price figure can be misleading, which is why it prefers to track something it calls the Aggregate Composite Multiple Listings Service House Price Index — a term that boils down to CREA's attempt to smooth out the numbers by adjusting for things like seasonality, and the type of housing.
Even despite those adjustments, the Toronto area's numbers are downright booming, up 23 per cent in the past 12 months to $727,300.
"It's pretty much the best time to be selling a Toronto home in at least 30 years," Bank of Montreal economist Robert Kavcic said, "with almost all new listings getting absorbed within the month."
Detached houses in the GTA are up 26 per cent in the past year, and condos are up by almost as much — 19 per cent. "The latter is pretty good evidence that supply-side fundamentals have been left in the dust," Kavcic said.
Markets close to the city are doing even better, with places like Guelph, London and Barrie pushing 30 per cent gains in the past year. "Note that these markets really began to burn around the same time that prices within Toronto itself began to detach from fundamentals," Kavcic said.
Add it all up and Wednesday's housing numbers show that Canadian real estate is becoming a tale of two cities: Toronto, and everywhere else.
"While every market has its own story, the most pressing issue at the moment is the melt-up in Ontario (not just Toronto) home prices," Kavcic said.