Driven by sharp price increases in the country's two largest markets, Canada experienced a five per cent surge in year-over-year average home prices for October, according to sale numbers released by the Canadian Real Estate Association (CREA). It also saw month-over-month sales rise by 0.9 per cent, though new listings for the month dropped by 0.8 per cent.
This time last year, the national average price for a home was $481,922. As of October 2017, it had risen to $505,937. While prices have risen in most major cities and regions around the country, it's clear that the heavy hitters have the most to do with the somewhat staggering increase. In Vancouver, the municipal home price average jumped from $891,705 to $1,074,834 (a 20.5 per cent jump!), making it the first time that the mean home was priced above the $1,000,000 threshold in a single Canadian city. Toronto continued its recent growth trend by rising 2.2 per cent from $762,975 to $780,104 and Montreal made a surprising 9.2 per cent jump from $354,163 to $386,911.
Some believe that all of this data points to these major cities being in the midst of a housing boom—one that may not get friendlier for buyers any time soon.
"At this point we do not see any real relief. In fact, the opposite is the case," said Benjamin Tal, deputy chief economist at CIBC Work Markets, Inc., in a report. "Without significant changes to land and rental policies alongside a dramatic change to housing preference among buyers, those centers will become even less affordable."
Others have taken a different view, arguing that the market simply needs more time to adjust to the new mortgage rules that were introduced late in 2016, as well as to rising interest rates. Beginning on Jan. 1, 2018, there will also be a mandatory stress-test taking effect, one that could further affect how hot the market is and how much people are willing to spend. So even though things are clearly trending in one direction right now, there are still a lot of unknowns on the horizon.