Canada Average Home Price Tops C$500,000 on Vancouver Surgeby
Vancouver and Toronto prices climb 26% and 15% on year
Inventory measure falls to the lowest level in six years
A soaring real estate market in Vancouver helped push the national average home price in Canada above the half-million dollar mark for first time in February, stoking concern that risks are becoming lopsided.
Average resale prices jumped 16 percent in February from a year earlier to C$503,057 ($376,880), the Canadian Real Estate Association said Tuesday from Ottawa, as prices rose 26 percent in Vancouver.
“It’s starting to look a little too hot for comfort,” Robert Kavcic, a Bank of Montreal senior economist, said by phone from Toronto. “It’s something to watch for sure.”
Relentless gains in the British Columbia city as well as in Toronto have led to calls for government intervention. Last year Finance Minister Bill Morneau raised down-payment requirements for mortgages on houses worth between C$500,000 and C$1 million. Those new rules, which took effect last month, may not be enough.
“Two of Canada’s hottest housing markets look set to stay that way heading into the spring home buying season,” CREA President Pauline Aunger said in the report.
Prices climbed to C$1.1 million in Vancouver in February from a year earlier, and 15 percent to C$685,278 in Toronto. Excluding those two cities, they rose 8.7 percent to C$355,235. Outside British Columbia and Ontario -- the provinces where Vancouver and Toronto are located -- the average price was C$286,911 in February, down 0.3 percent.
Diana Petramala, an economist at Toronto-Dominion Bank, predicted in a note to clients Tuesday that Canadian home-price gains will slow to below 3 percent in 2016, however “prices in Toronto and Vancouver should continue to grow well above that pace for the remainder of the year.”
On a monthly basis, existing home sales climbed 0.8 percent to 44,314, the highest level since June 2007. Sales rose 18.7 percent from February 2015. The number of months of inventory fell to 5.3 at the end of January, the lowest in six years, CREA said.
The realtor group also revised its forecast for sales to climb 1 percent to 511,400 this year, from a September prediction of 495,000.