Housing affordability ‘a growing challenge’ in Canada’s two hottest markets: Royal Lepage
A new report says while the slump in oil is stifling house prices in provinces driven by energy markets, other sectors have picked up the slack and taken home values to new levels nationally.
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The report from Royal LePage, which provides a composite price based on values in 53 of the country’s largest housing markets, finds the average home sold for $502,643 during the third quarter of 2015 — an eight per cent increase from a year earlier.
“Economic slowdowns in energy-dependent markets, most notably in western Canada, have in part been offset by both renewed industrial activity in other parts of the country and the Bank of Canada’s recent interest rate cuts,” said Phil Soper, chief executive of Royal LePage, in a statement.
Soper said that, as in previous results, the national numbers are being driven by double-digit percentage increases in the greater Toronto area and greater Vancouver.
“Housing affordability is already becoming a growing challenge for many individuals and families (Vancouver and Toronto),” said Soper.
In the GTA home prices were up 11.3 per cent to $612,261 from a year ago across all housing types surveyed. Toronto’s suburbs in some cases are outpacing parts of the city. The median price of a standard two-storey home in Richmond Hill rose 18.6 per cent to $963,561 and 18% in Vaughan to $842,173 from a year ago. A standard two-storey home in Toronto was up 17.1 per cent to $961,656 during the period.
“As homes in legacy central Toronto neighbourhoods move increasingly out of reach, we are observing that the more affordable areas in Southern Ontario, including the GTA suburbs, are experiencing substantial price appreciation and heightened sales activity levels,” said Soper.
The situation is similar in greater Vancouver where the average house price climbed to $928,532 in the quarter, up 12.9 per cent from a year with house price increases in some surrounding areas outpacing those in the city core.
Vancouver suburbs have seen house prices soar past $1 million. The median price of two-storey homes in Richmond rose 23.5 per cent from a year ago ago to $1,200,462 while the same comparable house climbed 20.9 per cent to $1,184,385 in Burnaby. In North and West Vancouver, the median price of a standard two-storey home was $1,267,113, and $2,775,782, respectively.
“Overall, economic growth in British Columbia, in conjunction with migration into the province, continues to drive local housing activity. We expect this to continue through the balance of 2015,” said Soper, adding increases may add some “credibility” to the notion that foreign buyers are driving up prices.
Nationally, the price of a two-storey home was $615,304 in the third quarter, up 9.9 year cent from a year ago. During the same period, a bungalow rose 6.8 per cent to $421,757 while condominiums increased 2.7 per cent to $338,945.
Weak oil prices continue to have an impact in Calgary, where the aggregate price of a home rose 0.8 per cent to $465,374 from a year ago. The median price of a two-storey home increased 1.0 per cent to $522,052 during the period.