According to a CBC report the average housing price numbers are somewhat skewed by the hot markets in Vancouver and Toronto.
While the headlines from the Canadian Real Estate Association may highlight the nearly seven per cent spike in the average price of a house over the past year, analysts say the real story is that for most of the country, the housing boom appears to be over.
"It’s not a disaster by any means, but we’re very much back to a normal or a soft market in a lot of parts of Canada," said housing analyst Ben Rabidoux, president of North Cove Advisors.
According to CREA, the average price of a Canadian home sold in June was $413,215, up 6.9 per cent from June of last year.
But that data is somewhat skewed by hot housing markets in cities like Vancouver and Toronto, where the average price of resale homes came in at $800,362 and $555,430 respectively. CREA noted that if those two cities are stripped out of the picture, the average Canadian house is worth a "more modest" $336,164 and the annual increase shrinks to 5.2 per cent.
"Across the country you can find a few major markets that are very, very strong but you can find most of the communities are not very strong at all right now," said housing economist Will Dunning. "In a lot of those areas, the numbers are even weaker than one might hope for. The economy is slowing down in a lot of places and the housing market is part of that slowdown."
"The strength is in Vancouver, Calgary, Hamilton and Toronto and you don’t see as exciting a story almost everywhere else in Canada."
While the Canada-wide number is very strong, it hides very sharp regional differences, Rabidoux said.
For instance, in Hamilton, the average price of a home lists around $400,000; in Calgary around $460,000. But Regina home prices average just $300,000, in Halifax, they average $275,000 and in Quebec City, just $268,000. And in those regions, prices have either cooled or dropped altogether.
“Outside of a few major metros, the boom is over," he said. "In fact, we’re seeing now a number of markets that are seeing weakness that we haven’t seen in 20 years. And that’s very much being hidden by this incredible strength in Toronto and Vancouver."
"So it’s very much a story right now about the haves and the have-nots and that’s sort of hidden in the [CREA] headline," Rabidoux said.
"You've got this very severe imbalance between supply and demand. And you have the exact opposite dynamic in Vancouver, Calgary and Toronto where you’ve got not a lot of supply and a lot of demand," Rabidoux said. "We really haven't seen a national market like this where we have such sharp regional differences."
(Source: CBC News Posted: Jul 16, 2014)
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