Homeowners that are looking for a Calgary mortgage or a Toronto mortgage, and are hoping that prices are going to drop soon will find no relief, according to a report released by the Canadian Real Estate Association on Friday.
The report shows that home prices across Canada rose an average of 5.1 per cent in April of this year when compared with March of 2011. And the stats show that it’s still the most expensive places to live in Canada that only keep getting pricier.
Vancouver may have been the city to watch for a long time but Toronto is quickly taking over and they’ve proved it. CREA’s report showed that Toronto had the highest increase in home prices with an increase of 7.9 per cent from where home prices sat last year. Comparatively, Vancouver only saw an increase of 3.7 per cent. Calgary even saw a higher increase than that with prices jumping an average of four per cent. Montreal had the lowest price jump of all the biggest cities in Canada, with prices there only increasing 2.3 per cent over what they were last year.
Wayne Moen, president of CREA said in a statement along with the report, “Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fueled by some very strong housing market fundamentals,” he said. “Toronto has less than two months of supply compared with six months nationally, so it ranks among the tightest of Canadian housing markets.”
Speaking about Toronto specifically he said, “Toronto has less than two months of supply compared with six months nationally, so it ranks among the tightest of Canadian housing markets.”
The report also broke the different sectors of the housing market down, showing what kind of gains each different type of housing had. Single-family homes rose on average of 6.4 per cent from 2011, while apartment unit prices went up by 3.6 per cent. Town homes didn’t see as much of a gain in the multi-family sector as apartment buildings, but these still rose as well, seeing a 2.7 per cent climb over the year.
While prices may not drop drastically when the Bank of Canada raises interest rates slightly, they are expected to drop somewhat. The Bank of Canada, along with the federal government, is hoping that the rate increase will help to correct the market and slow borrowing. If Europe doesn’t see any more financial unrest, those Bank of Canada rates are expected to go up as early as this fall.