Housing markets in B.C.’s Lower Mainland as well as in Southern Ontario continue to post substantial jumps in average prices, new data shows, as worries persist about a potential bubble.
The Canadian Real Estate Association released monthly figures for February on Tuesday that showed home prices in the Vancouver area as well as the adjacent Fraser Valley rising by more than 25 per cent last month compared to February last year (see chart below).
Across the country in Southern Ontario, the picture is similarly exuberant, with average prices in the Greater Toronto Area rising 14.9 per cent in the month. Similar to B.C.’s Fraser Valley, adjacent markets to Toronto also experienced strong jumps in average prices, led by a 13.9 per cent pop in the Niagara region.
“The strong gains likely reflect folks moving ever further out from Toronto in search of affordable housing,” said BMO chief economist Doug Porter.
The significant regional price jumps pushed up the national average price by 16.4 per cent last month, to $503,057 – a “gaudy” rise, Porter said.
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In contrast, average prices outside B.C.’s Lower Mainland and Southern Ontario fell 1.4 per cent in February—further reflecting the resource slump that’s hammering oil-producing regions of the country.
“The double-digit gains in both sales and average prices are almost entirely a function of flaming-hot markets in lower B.C. and around Toronto,” Porter said in a research note.
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Not surprisingly, sales and prices are under sustained pressure in Alberta as well as pockets of Saskatchewan and Atlantic Canada. The remainder of centres tracked by CREA showed moderate market conditions in February.
“The Canadian housing market remains a tale of three solitudes—the uber-strength in Vancouver and Toronto (and surrounding cities in both regions), ice-cold conditions in markets exposed to oil prices, and the just-right middle markets in almost every other region,” BMO’s Porter said.