The price for a house in Ontario in 2022 is forecasted to be approximately 942,300 Canadian dollars. “And that’s going to be very problematic for people who bought at the top … and never see those home prices go back up again,” he says. The risk of a housing bust is higher in some of the smaller communities that have seen steep price appreciation, Moffatt says. But even stress-tested homeowners might feel the pinch from higher borrowing costs, Petramala says. And not all recent homebuyers had to go through the stress test, which isn’t mandatory for all lenders, Petramala notes. And for recent homebuyers, the question is what happens as interest rates rise from record lows.
Home prices in the Fraser Valley have declined by 8% year-over-year, while Victoria home prices have fallen by 4% year-over-year to $943,834. Greater Vancouver's average home price for October 2022 was $1,231,805, up 1% year-over-year. The Prairies’ major urban markets have held onto much of their price gains over the past year. Home prices in Calgary have increased by 5% year-over-year to $509,576, while Edmonton home prices had a 1% annual decrease to $381,451.
Average house prices in Canada in 2020, by province
Generally, the most expensive real estate is found in the largest (and, therefore, most in-demand) cities of each province. Across Canada, the highest housing prices are then in the largest cities for the same reasons. The average income in PEI is around $45,900, meaning the average home price is about 7.3x the average income. Unfortunately, data for individual communities in PEI is not easy to find as the province's small size does not make this a viable or necessary data point.
In fact, in these areas, a smart investor can make very good money on lower-priced homes. In Nova Scotia, the average price of a home in September 2021 was $356,757. The average income in Nova Scotia is around $48,400, meaning the average home price is about 7.3x the average income.
Property types
The mortgage stress test, which Ottawa rolled out in two phases in 2017 and 2018, helps reduce the risk of higher borrowing costs. The test means federally regulated lenders must vet buyers’ finances to ensure they’d still be able to make mortgage payments with a higher interest rate. Even in Alberta, where the housing market has been dormant for years, activity is heating up.
In New Brunswick, the benchmark price of a home in September 2021 was $262,200. The average income in the province is around $49,500, meaning the benchmark home price is about 5.2x the average income. Montreal is easily the most expensive city in Quebec due in part to being the second-most populous city in Canada.
Living in Canada
Looking at average home prices in New Brunswick, the average in Greater Moncton was $295,208 for August 2022, $282,379 for Fredericton, and $280,996 for Saint John. Though the major cities tend to be more expensive, an investor should also recognize the possible financial benefits of rising home prices and higher rental demand. Big cities may provide the best ROI, but you will need much more starting capital to get into the housing market.
The average price for a detached home according to the Winnipeg Regional Real Estate Board was $364,817 in September 2021. Cities such as Airdrie, Red Deer, and Lethbridge are near enough to Calgary while managing to be much more affordable. For example, the average home in Airdrie costs $395,300, over $60,000 cheaper than Calgary proper. The Canadian Real Estate Association compiles monthly statistics on activity over Multiple Listing Service® Systems of Canadian Real Estate Boards and Associations.
Real Residential Property Prices for Canada (QCAR628BIS)
There are a multitude of reasons for this, but most residents believe that foreigners investing in the market cause the high housing prices. Ontario is the most populated province in Canada, located on the eastern-central side of the country. To the south, it borders American states Minnesota, Michigan, Ohio, Pennsylvania, and New York. Furthermore, a large part of Ontario’s economy comes from manufacturing, as it is the leading manufacturing province in Canada. The median total family income in 2016 came to 83,160 Canadian dollars.
This year, Calgary saw its best March in terms of sales volumes since 2007. In 2017 house sales have fallen in Canada and prices have stabilized in most provinces. Incomes in Canada have steadily risen since 2000 and show no signs of slowing down in the near future. This should improve housing affordability, as long as home price growth slows down.
Saskatoon, Saskatchewan's other major city and the province's largest, is comparable in price to Regina, though homes were marginally cheaper on average. In Saskatchewan, the benchmark home price in September 2021 was $286,600. The average income in Saskatchewan is around $54,300, meaning the benchmark price of a home is about 5x the average income. The least expensive homes in Saskatchewan are in the areas of North Battleford and Melville with prices well below $200,000.
For each province, and each major city in each province, we will report the most up-to-date average house price. Where they exist, we will also offer some more affordable alternatives nearby. The average house price in British Columbia amounted to 848,200 Canadian dollars in 2020, but it was estimated to rise to 991,400 Canadian dollars by 2022.
Meanwhile, Winnipeg’s average home price is up 4% year-over-year to $354,818. The Canadian Prairies, once a housing market that lagged behind the price gains seen in other parts of the country, are now seeing a slight downturn in home prices. The average home price in Alberta for October 2022 was $430,964, up 2% year-over-year. Saskatchewan's average home price is down 6% year-over-year, to $283,939, while Manitoba's average home price is down 4% year-over-year to $332,200. The Maritimes have performed relatively well compared to the rest of the country.
Likely, home prices will flatten out for possibly several years, allowing incomes to gradually make up some of the ground lost. The dizzying pace of home price growth in the past several months is “quite unusual and it’s certainly unsustainable in the long run,” says Guatieri. “Households are more sensitive than they ever have been in the past to even small increases in interest rates,” Petramala says. Now, though, prices have risen so much they’ve eroded the affordability gains from extra-cheap borrowing, she adds. The benchmark home price, at $441,900, was more than six per cent higher than last year’s levels, although property values remain below their 2014 highs, the Calgary Real Estate Board said.
What's next for home prices?
This statistic shows median house prices in Canada in 2020, by province. The Toronto housing market has seen a collapse in sales volume as buyers retreat from one of Canada’s most expensive housing markets. The average home sold price in the GTA was $1,089,428 for October 2022, representing a decrease of 6% year-over-year. GTA home sales are down 49% year-over-year, with 4,961 transactions in October. At 1,746 square feet, the average home in the state costs less than $100 a square foot, meaning those with the budget can afford more house for their dollar than they can in most states. However, Oklahoma has high levels of poverty and low levels of quality of life satisfaction.
Canada's index score in the first quarter of 2022 amounted to 150.5, which means that house price growth has outpaced income growth by almost 51 percent since 2015. Along with Vancouver, Toronto is one of the largest real estate markets in Canada. The average price for a home in Toronto was $1,136,280, making it the second most expensive city in the country. Toronto is Canada's largest city and draws a lot of domestic and international attention, thus commanding high prices for real estate. We will also include a figure for average household income as a way to see how affordability stacks up across provinces. The greater the ratio between the average home and the average household income, the less affordable the housing market is.
No comments:
Post a Comment