It’s well understood that the housing market in Canada has cooled considerably over the last part of 2018 and through 2019 to date. The reasons for that have been discussed at length, and while Canadian real estate prices have turned negative, not all markets are suffering. The Canadian Real Estate Association (CREA) has released numbers showing the national price index declined for a second month in a row in March. We have to go back to September of 2009 to see the last time price declines were seen in Canada.
However, despite the national drop, underperforming markets are beginning to boom. This is mixed news for real estate agents in Canada, meaning more business to be had but lower commission returns on doing this business (at least in the majority of instances). Our online real estate lead generation system here at Real Estate Leads is an excellent way for realtors to generate more leads, and current market conditions like these make that as important as ever.
2nd Month of Annual Declines
Canadian real estate prices are coming in with annual declines for a second month. CREA indicates the benchmark price of a typical home was $617,200 in March, and that is up 0.83% from the previous month. This is an annual decline of 0.47% from last year, and these current prices are down 2.25% from the all-time high. April of 2017 saw it at its recent highest, a 19.31% percent jump from the month previous, but it fell considerably after that. The benchmark price was nearly half the value it was in April by the time December 2017 came around.
It has recovered little over the last year, and the annual pace of growth is showing the declines are getting bigger. The 0.47% decline in March is an increase from the month before. This is the 2nd month of negative annual growth, and the biggest one since the fall of 2009. While the decline is very small in the big picture, it could still be the start of a larger trend. Obviously it is advisable for the entire industry to be watching this number closely.
Ottawa, Montreal & Guelph Real Estate Make Largest Gains
The market’s leading price gains were for Ottawa, Montreal, and Guelph, Ontario. Ottawa’s typical home price grew to $405,500 in March, an increase of 7.64% from last year. This was the largest gain in the country. Guelph came next with a typical home now selling for an average of $537,700, up 7% from last year. Montreal came third with an average home price of $357,600, and increase of 6% from last year. While these markets made substantial gains, they are still significantly below the national index.
Largest Annual Price Drops
The most sizeable annual prices drops were in Vancouver, Barrie, Ontario and Calgary. Vancouver’s standard home dropped to $1,011,200 in March, down 7.65% from last year (and the most relevant median house price drop in Canada given the market dynamics and factors there). Barrie came next with the standard home falling to $460,600, down 6.06% from last year. Calgary rounded this trio out with prices falling to $409,400, down 4.95% from last year.
5 Canadian Real Estate Markets With New Highs
Negative national growth isn’t a detraction for all markets. 5 hit new all-time highs – Ottawa, Guelph, Montreal, Niagara, and Hamilton. Each of these cities established new highs for the price of a home in March. Again, these markets are all under the national average, and were ones that had been underperforming over the past 5 years.
Price Changes From Peak
The percent change from peak pricing seen with typical homes in Canada’s largest markets is something to consider here, and most notably that some smaller urban markets are very far from their peaks. Edmonton is where we see the biggest gap, where the price of a typical home costs $319,000 – a drop of 17.18% from its peak price. Regina is the same story, with a typical home falling to $264,100, dropping 16.51% from peak. A Barrie, ON home was median valued at $460,600, down 15.65% from last year.
Toronto and Vancouver real estate didn’t find themselves at the extreme ends of the peak, and fell somewhere in the middle instead. Toronto’s typical home is now valued at $779,100 in March, a reduction of 4.63% from the all-time peak. Vancouver fell to $1,011,200, down 9.24% from peak.
Canadian real estate markets are seeing negative growth, and there are only a few locales that are notable exceptions. Only half of markets grew above the pace of inflation, and the largest markets have been growing close to it. This is natural as demand in these cities tends to provide something of a buffer to extensive shifts. Overall the national decline is quite tiny at this point. So small in fact that a single month of more frenzied activity could push it back to more desirable conditions for the real estate industry.
Keep in mind the fact that the market is struggling to see gains. This is especially true after the significant drop in growth from the April 2017 peak.
Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered only to you and for your similarly-exclusive region of any city or town in Canada. These leads are bonafide opportunities for you to take a prospect and convert them into a client. Granted, much more has to occur in order for that to become a reality, but having the initial contact possibility generated for you is something that is extremely valuable for a realtor working in a competitive market.
