Home prices in Canada’s five biggest housing markets rose at a manageable pace in the third quarter for the first time in six years, according to the latest Royal LePage House Price Survey.
The report, released Thursday, revealed prices in the Greater Toronto Area, Greater Vancouver, and Greater Montreal Area, Calgary, and Ottawa all rose at rates between 1.5 and 3.5 per cent on a quarter-over-quarter basis.
“Uneven regional economic growth has plagued Canada for much of the past decade, a challenge most evident in the nation’s housing markets,” Royal LePage President and CEO Phil Soper said in the report. “For the first time since 2011, we are seeing real estate in all five of our largest cities appreciate at a manageable, healthy clip.”
“Canadian housing is enjoying a Goldilocks moment – not too hot, and not too cold,” Soper added. “For now, the Toronto and Vancouver housing markets have returned to earth,” he continued, noting rising interest rates and a strong loonie kept prices from appreciating rapidly.
Of the five major markets, Toronto saw the greatest year-over-year aggregate home price increase in the third quarter, rising 21.7 per cent to $860,295. Vancouver home prices inched 2.5 per cent higher to $1,229,133, whereas Montreal prices climbed at a higher-than-normal pace, surging 14.3 per cent year-over-year to $511,129.
While Toronto saw the biggest price increases year-over-year, home sales in the region have slumped in wake of Ontario’s 16-point plan aimed at cooling the market.
Soper said the market correction in Toronto will be much shorter than the one seen in the Greater Vancouver Area in 2016.
“Toronto home prices are much lower than those we see in Vancouver, and the overall size of the market is considerably larger,” he said.
“Waning foreign investment should impact the Toronto market less severely. We expect the correction to be shorter in comparison to what was experienced last year in B.C.’s Lower Mainland.”
Soper also noted that in urban areas like Toronto and Vancouver, condominium prices have risen faster than any other housing type and will continue on that path for the foreseeable future as their affordability is attractive to first-time homebuyers.