Hot markets ‘obscuring’ Canadian home prices

The national average sale price for a home rose 9.4 per cent, year over year, in March — but just 2.4 per cent if it wasn’t for Canada’s two hottest real estate markets, Toronto and Vancouver.

Sales climbed, as usual, in March over February in about two-thirds of all major Canadian housing markets — they were up about 4.1 per cent — as the country heads into the peak spring buying period of April, May and June, according to figures released Wednesday by the Canadian Real Estate Association (CREA).

The average national price of a home sold in March was $439,144, but a far more modest $332,711 if Toronto and Vancouver sales are excluded from the statistics, noted CREA.

“Price gains in these two markets are being fuelled by a shortage of single-family homes for sale in the face of strong demand. Meanwhile, supply and demand for homes is well balanced among the vast majority of housing markets elsewhere across Canada,” CREA chief economist Gregory Klump said in a statement.

In fact, Toronto and Vancouver are “partially obscuring the broader national trend.” The country is now in the midst of a soft landing, according to the Royal LePage House Price Survey, also released Wednesday.

The average price of a home across the country rose just 3.8 per cent to 6.6 per cent, year over year, in the first quarter, thanks to a softening of price growth that started taking hold in most major markets — again, Toronto and Vancouver being the exceptions — in mid 2014, says the report, which looks at some 250 neighbourhoods across the country.

“We define a soft landing as a market in which home prices are flat or increasing slightly, giving the economy and family incomes a chance to catch up,” said Phil Soper, president and chief executive of Royal LePage.