The fact that the average price of a home in Canada fell slightly in March should be good news to those still thinking that Canada is in a housing bubble. But, while mortgages in smaller cities (such as Sudbury mortgages) may be going down, the stats are still slightly skewed by those major Canadian cities that show no signs of slowing down.
According to a report released last week by the Canadian Real Estate Association, the average price of a home in Canada dropped by 0.5% in March when compared to one year ago, in March of 2011. This year the average price on a home was $369,677, down from the $371,591 that is was in March of last year, and down from the $373,00 figure we had for the average price of a Canadian home in February. But as we’ve said, that’s not the case for all markets. There’s still a major difference when you’re looking at Vancouver and Toronto mortgages.
“Average prices are up from year-ago levels in most large urban centres,” says Gregory Klump, CREA’s chief economist, who upon releasing the report also pointed to overvaluations in some Canadian markets. “The slight decline in the national average price points to a tug of war between Toronto and Vancouver from the standpoint of their sales mix compared to last year.”
It’s also not just overvaluations that are happening in Canada’s biggest cities that are causing the number to be slightly skewed, but the result of many luxury homes and properties being scooped up in those major cities. But, the fact that these high-end properties are being gobbled up is probably just a freak occurrence, says Klump, as he doesn’t expect the same stats to show up next year when interest rates will likely be a little higher and the mixture of sales will even out. For the time being however, Klump pointed to the luxury market in Vancouver and said, “The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”
But even with a mixed market, those major cities are certainly showing no signs of slowing down on any of their prices, not on luxury properties or otherwise. Home sales in these cities actually increased 2.5% when compared with last year, with Toronto, Calgary, Edmonton, and Vancouver all being the most expensive cities to currently buy a home.
