Michael Babad – Globe and Mail

Canada’s over­all hous­ing mar­ket appears to be tame, though Toronto has stolen the label of “hottest” from Vancouver.

Sales of exist­ing homes in Canada picked up by 2.5% in March from Feb­ru­ary, though the year-over-year level was slower at 1.6%, the slow­est since last April, in fact.

The aver­age price, in turn, dipped 0.5% to $369,677 from a year ear­lier, the Cana­dian Real Estate Asso­ci­a­tion said today, though that’s skewed by regional dif­fer­ences, notably Toronto and Vancouver.

“If we step back from the monthly gyra­tions seen in this data release, we see that price and sales’ gains are com­ing in fairly flat (between –2% and 2%),” said Toronto-Dominion Bank econ­o­mist Sonya Gulati.

“This pro­file is in line with our expec­ta­tions for the year. This pace cap­tures increased activ­ity from low-cost bor­row­ing con­di­tions, but also neg­a­tive head­winds from house­holds begin­ning to curb their spend­ing in light of inter­est rate hikes to come and record-high house­hold indebtedness.”

Deputy chief econ­o­mist Dou­glas Porter agreed.

“Price changes are also far from frothy nation­ally, dip­ping 0.5% year-over-year, and up a mod­est 0.7% year-over-year in Q1 – again rais­ing the ques­tion of what all the fuss is about for Cana­dian hous­ing (out­side of Hog­town),” he said.

“The notable pull­back in sales in pricey Van­cou­ver dis­torted the result, as weighted-average prices actu­ally rose 2.4% year-over-year. And, 19 of the 26 largest mar­kets reported single-digit price increases from year-ago lev­els, hardly con­sis­tent with an out-of-control market.”

Over the past year, only three cities have chalked up price gains in the double-digit area, Mr. Porter noted, one of which is Toronto, at 10.5%.

Van­cou­ver, where prices are now down about 3% from a year ago, and which had been skewed ear­lier by the pricey seg­ment, is now mov­ing in an oppo­site direc­tion from Toronto, Ms. Gulati added.

“It was around this time last year that Van­cou­ver was labelled the hottest hous­ing mar­ket in the coun­try,” she said.

“Back then, high-end home sales were dri­ving up out-sized sale and price gains. The 2012 data sug­gest that the acco­lade has now been given to Toronto. But, both urban cities should expe­ri­ence weak­ness in 2013–14 as inter­est rates begin to inch up from cur­rent lows.”

The Van­cou­ver and Toronto changes aren’t show­ing up only in resales, but also in new homes.

“These fig­ures are con­sis­tent with those on the sale prices of new homes in Feb­ru­ary released last week,” said Pro­fes­sor John Andrew of the Queen’s Uni­ver­sity School of Urban and Regional Plan­ning and School of Business.

“For those, Toronto also pulled the aver­age national new home price up to an increase of 2.3% year-over-year. Van­cou­ver new home prices declined by 2.9% in the same period. For the past sev­eral months, prices have con­tin­ued to decline in Van­cou­ver, while they con­tinue to climb sharply in Toronto, led mainly by con­do­minium sales.”

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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