Today, we look at some real estate trends and statistics.
Canada’s housing bubble
According to a BMO study, Canada’s housing prices are up by one and an half times over the past 20 years. After adjusting for inflation, this means that Canada is pretty much on par with Belgium, Denmark, France and Finland and just ahead of the U.S. Ireland and Spain. Look at Norway!
Canada’s houses are overpriced, but not by much.
According to the CMHC – the Canadian Mortgage and Housing Corporation, Canada’s housing markets are overvalued, but not by much. The report notes that Canadian home prices remain higher than those in the United States and this could be cause for concern.
Montreal and Quebec have the highest risk of overvaluation. Toronto, Calgary and Halifax have moderate risk. Kitchener Waterloo was not reported.
Other factors associated with overvaluation like price acceleration, and over building are not a concern. All in all, our housing markets are “broadly consistent with underlying demographic and economic factors such as employment and interest rates.”
Our home prices have never been higher
Canada’s average house price increased 7% to just under $420,000 in October, the busiest October since 2009. Great news if you own property or are selling. Not so good news if you are trying to buy.
Different rates for different types
Not all real estate increases at the same rate. Two-storey single family homes saw the larges price increases, followed closely by townhouses and then bungalows. Condos saw the smallest price increase, up 3.5% over a year earlier.
Different localities, different rates
Toronto and Vancouver are skewing the national average up, but take those two markets out and housing prices are still up nationally by 5.4%.
In Kitchener Waterloo, prices were up by more than 7% in both September and October.
Interesting to note that nine cities actually saw prices decreases. St. Catherines, Winnipeg and Ottawa were among the them.
Factoid – The rise of condos
In the early 1990s condominium apartment starts accounted for less than 20% of all housing starts. Last year, they accounted for more than 1/3 in all of Canada and more than 1/2 in Canada’s biggest cities.
In Vancouver, condos made up 62.6% of all housing starts last year.