Policy-makers probably won’t do anything to cool prices now, since many smaller housing markets aren’t running as hot as Toronto, Calgary and Vancouver.MIKE CASSESE/Reuters
The Globe's Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter Tara Perkins. Read more on The Globe's housing page and follow Tara on Twitter @TaraPerkins.
Home prices in Canada's major cities are running at a rate many economists just don't think is sustainable.
We won't get a complete picture of sales and prices in August for a couple of weeks, but preliminary figures from local real estate boards suggest there's plenty of momentum. And that has some economists wondering about how long this will last.
"Existing-home sales remained strong in a number of major cities in August and prices continued to outrun income," Bank of Montreal economist Sal Guatieri wrote in a research note. "How long prices can continue to outpace family income in these major cities is unknown, but it can't go on forever. The longer it does, the greater the risk of a correction when interest rates rise."
Falling mortgage rates helped make homes more affordable heading into the summer, according to Royal Bank of Canada. And a recent survey by real estate consulting and research firm Altus Group found home buying intentions everywhere except B.C. were up this summer compared with a year ago. "While first-time buyer intentions are down slightly, homeowners with mortgages are showing more interest," Altus Group said.
Policy-makers probably won't do anything to cool prices now, since many smaller housing markets aren't running as hot as Toronto, Calgary and Vancouver.
Here's a look at how some markets across the country performed in August, according to data released this week by their local real estate boards.
TORONTO
– 7,600 homes sold on the MLS, up 2.8 per cent from a year earlier, and well above the 10-year average sales level of 7,059 for August.
– the average selling price of all types of homes in Greater Toronto was $546,303, up 8.9 per cent from a year earlier.
– the average price of detached homes in the downtown area covered by the 416 area code was $902,428, up 14.7 per cent; for condos it was $370,899, up 4.1 per cent; for townhouses it was $463,798, up 11.7 per cent.
CALGARY
– 2,267 homes sold on the MLS, up 3.4 per cent from a year earlier; condo sales were up 14 per cent and townhouse sales up 20 per cent, sales of single-family homes fell 2.4 per cent.
– the average price of a single-family home was $545,238, up 5.42 per cent, and the benchmark price of a single-family home was $512,300, up 10.24 per cent; the average price of a condo apartment was $332,006, up 11.48 per cent, and the benchmark price of a condo apartment was $298,200, up 10.2 per cent.
– the average number of days a home spent on the market before selling dropped to 39, from 45 a year earlier.
VANCOUVER
– 2,771 homes sold on the Multiple Listing Service, up 10.2 per cent from a year earlier and 4.3 per cent above the 10-year average for August.
– the benchmark price of all types of homes in Metro Vancouver rose 5 per cent to $631,600 (the benchmark seeks to create a more apples-to-apples comparison than the average price, which can be distorted by changes in the size or location of homes that are selling.)
– the benchmark price of detached properties rose 6.6 per cent to $984,300; the benchmark price of apartment properties rose 3.6 per cent to $379,200; the benchmark price of attached properties rose 3.9 per cent to $474,900.
OTTAWA
– 1,203 homes sold on the MLS, down 1.1 per cent from a year earlier, but a tiny bit above the five-year average of 1,199.
– the average sale price for all types of homes was $360,214, up 3.4 per cent.
– the average price for a condo was $263,996, up 2.7 per cent, while the average price of other types of homes was $381,628, up 1.9 per cent.
EDMONTON
– 1,552 homes sold over the MLS, down 6 per cent from a year earlier.
– the average selling price of all types of homes was up 5 per cent to $368,597, the median selling price was up 5.7 per cent to $348,900.
– the median price of a single-family home rose 5.8 per cent to $402,750, while the median price of a condo fell by 0.6 per cent to $228,500.
REGINA
– 348 homes sold over the MLS in the Regina area, down 8 per cent from a year ago. That was below the five-year average of 365 but above the ten-year average of 336.
– inventory levels are the highest they've been in more than 20 years. The number of properties for sale at the end of August was 223 per cent higher than two years earlier.
– the benchmark price was $299,600, down 2.4 per cent from $307,000 a year earlier and homes sat on the market for an average of 48 days before selling, compared with 32 days a year earlier.