Single-Family Homes in Canada Up $100K Since August
Friday Mar 19th, 2021
It’s a tale we’re all more than familiar with by now: rock-bottom interest rates, changing housing needs, and high household savings coupled with a fear of missing out and low inventory have pushed Canadian home prices to new levels. Case in point is that in the past six months alone, single-family homes have surged $100,000 (or nearly 15%) in value in Canada — marking the steepest increase for the national benchmark price on record.
While the country’s most expensive markets, Vancouver and Toronto, recorded above-average gains of $143,000 and $139,000, respectively, it was markets in the periphery that led the way. Calling Canada’s housing market ‘hot’ right now is an understatement. Prices have passed the boiling point in many parts of the country as eager buyers outbid one another amid low single-family home inventories.
While historically-low interest rates and increased household savings are obvious factors encouraging buyers to move (or make the investment plunge), Hogue says there’s more at play here. A strong pick-up in condo activity and firming demand-supply conditions since December, point toward stronger condo prices later this year. A “creeping-up” of longer-term interest rates, deteriorating affordability, the possibility of a return to the office, and a possible policy intervention could also help cool homebuyer demand, and set the stage for a “soft landing” for national housing prices.