Canadian Housing Market News

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Canada Real Estate Market Overview for All Property Types

REPORT UPDATED: APRIL 15, 2021

Transactions

76,259

76%

vs. Mar 2020

Average Sold Price

$716,828

32%

vs. Mar 2020

MLS® Benchmark Price

$715,300

18%

vs. Mar 2020

Over the past year, housing markets in Canada have experienced historical growth in both home prices and sales activity. Inventory dropped while demand increased, causing a dramatic shift to a seller market. This month's data (March 2021) marks a year since COVID-19 made its first major impact on Canadians, and the story has been incredible.

March saw new records for both average home prices and number of homes sold in Canada, surpassing even previous summer highs. The national average sold price reached $716,828, a 32% increase year-over-year. Home sales have jumped even more with a 76% year-over-year increase to 76,259 transactions this month. While the comparisons are exaggerated by the comparison against an unusually weak March 2020 as well as a shift to more expensive suburban and freehold properties, current figures are still far above the long-term averages for both prices and transaction volume.

This growth has been experienced by almost all markets in Canada. Vancouver's housing market saw home sales more than double from last year levels with prices up by 9% in a year. Calgary's housing market and Edmonton's housing market both saw a similar doubling in transactions and a 13% and 14% increase in average sold prices, respectively. This was partially due to the outsized impact COVID-19 had on Alberta's housing market last year.

In Central Canada, Toronto's housing market made news last month when average home prices broke $1M for the first time. This month, prices have almost reached $1.1M, a 22% increase year-over-year with a 95% increase in transactions. Ottawa's housing market also surpassed expectations with a 31% increase in average home prices to $677K and a 50% increase in transactions compared to March 2020. Montreal's housing market, a major winner in the past few years, lagged slightly behind with a 14% increase in average home prices and 31% increase in transactions.

In Atlantic Canada, while we do not track city-level housing markets, we do have data on province-level statistics. Average home prices in Nova Scotia and New Brunswick have grown dramatically in the last year with 26.7% and 32% increases, respectively. Home prices in Prince Edward Island also grew with a 21.9% year-over-year increase.

The next few months will show whether or not current trends will stabilize or breakout upwards or downwards. Additional fiscal spending and sustained quantitative easing by the Bank of Canada are tailwinds to the current market, not to mention additional capital from Canada's southern neighbour. However, increasing bond yields and rising mortgage rates can put an end to the music, especially with the proposed increase in the CMHC Stress Test rate. No matter what happens, Canada will still remain an attractive market with its stable politics and high standards of living.

Canada Real Estate Market Trends for All Property Types

What is the MLS® Home Price Index?

Breakdown By Region

33%

vs. Mar 2020

Hamilton Real Estate Report and Forecast

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Residential Property Price Index

The Residential Property Price Index (RPPI) is a housing price index published by Statistics Canada that measures the change over time in selling prices of residential properties. It analyzes both new and resale properties in the census metropolitan areas (CMAs) of Montréal, Ottawa, Toronto, Calgary, Vancouver, and Victoria. The national composite is the weighted average of all the areas measured by the index. The index is relative to a standard of 100 set in 2017.

RPPI for All Residential Properties

Prices for residential properties in Montréal, Ottawa, Toronto, Calgary, Vancouver, and Victoria continue to skyrocket as prices increase across Canada by 7% year over year in Q3 2020. The biggest increases were seen in Ottawa, where home prices have risen by 14.9% compared to Q3 2019. The capital city is expected to remain strong amidst COVID-19 due to its economic stability and high availability of government jobs. Montreal and Toronto also remained hot with 10.2% and 9% increases respectively. Calgary, on the other hand, has faced a decline in home values at least partially attributed to falling oil prices and decreased local investment.

RPPI for Condominium Apartments

Prices for condo apartments in Montréal, Ottawa, Toronto, Calgary, Vancouver, and Victoria increased by 10.4% compared to Q3 2019. This growth outpaces the overall average of 7% for all properties types. The biggest increases were seen in Ottawa, where prices have risen by 17% compared to Q2 2019. Toronto is second with year over year increases of 14.1% despite the impact of COVID-19. Even Vancouver, where properties stagnated for 2018 and 2019 due to their Empty Homes Tax and Speculation taxes, is experiencing a revival in its condo market. In contrast, Calgary faced a year over year decrease of 6.2% due in part to falling oil prices.

New Housing Price Index

The New Housing Price Index (NHPI) is a housing price index published by Statistics Canada that measures the change over time in selling prices of new residential properties. It is published by Statistics Canada and used by governmental agencies, market analysts, and real estate businesses. The index is relative to a standard of 100 set in 2017.

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Real Estate in Canada

Real Estate Transactions in Canada

In 2019, residential real estate transactions in Canada reached 486,800, a 6.2% increase from a five-year low recorded in 2018. The number reflects increased activity in Ontario and Quebec, where activity was up by 9% and 11% respectively.

Real Estate Agents

Real estate agents in Canada are licensed professionals who help home buyers and home sellers navigate the real estate market and conduct real estate transactions. Most real estate agents are part of the Canadian Real Estate Association (CREA), a professional association that oversees real estate markets nationally. You might be familiar with their trademarks: MLS®, Multiple Listing Service®, and REALTOR®.

In Canada, there are over 130,000 real estate agents across all the provinces and territories. Ontario has the most agents out of any province with 79,000 agents across 38 local rea estate boards. Of those 79,000 agents, over 56,000 are part of the Toronto Regional Real Estate Board (TREB). British Columbia is second with 23,000 real estate agents and 11 real estate boards.

Real estate agents are regulated on a provincial-level. Each province has their own regulatory board that sets regulations for and oversees the conduct of real estate agents in the province. In Ontario, the Real Estate Council of Ontario (RECO) regulates real estate transactions and helps resolve complaints against real estate agents. In B.C., the Real Estate Council of British Columbia (RECBC) regulates real estate transactions and helps resolve complaints against real estate agents. Other notable councils include RECA (Alberta), SREC (Saskatchewan), and OACIQ (Quebec).

Other Real Estate Statistics

Homeownership Rate: 67.8% (2016)

Vacancy Rate: 3.2% (2020)

Housing Construction

Housing Starts: 63,720 units (Q4 2020)

Housing Under Construction: 292,109 units (Q4 2020)

Housing Completions: 50,938 units (Q4 2020)

Investment in Residential Construction: CAD $11.1 billion (Q4 2020)

Investment in Non-Residential Construction: CAD $4.4 billion (Q4 2020)

Average Rent for a 2-Bedroom Unit

As reported by Statistics Canada and the CMHC

Region	Average Rent for a 2-Bedroom Unit
Greater Toronto Area, ON	$1,622 (2020)
Ottawa, ON	$1,517 (2020)
Vancouver, BC	$1,792 (2020)
Victoria, BC	$1,507 (2020)
Quebec City, QC	$899 (2020)
Montreal, QC	$903 (2020)
Edmonton, AB	$1,272 (2020)
Calgary, AB	$1,323 (2020)
Winnipeg, MB	$1,262 (2020)
Saskatoon, SK	$1,166 (2020)
Halifax, NS	$1,255 (2020)

Glossary and Definitions

MLS® HPI: The MLS® Home Price Index (HPI) is an index by the Canadian Real Estate Association (CREA) that tracks the prices of homes in a neighborhood. It allows Canadians to quickly compare home prices across Canada and between periods of time without having to account for specific features of a property. Unlike market prices, which can fluctuate from month to month based on seasonal dynamics, the HPI provides a stable view tracks trends across a longer period of time. The HPI is reviewed every year in May to adjust for changes in the real estate marketplace.

MLS® HPI Benchmark Price: The MLS® Home Price Index (HPI) Benchmark Price is the HPI translated into a real-world price number.

Strata Insurance: Strata insurance is insurance used by a strata like a condominium to covers damages to common areas and assets and liability to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. The insurance can cover:

Buildings and structures associated with the strata including common areas such as the roof, parking garages, driveways, gyms, pools, etc.
Liability for any property damage or bodily injury suffered on strata property
Any fixtures that are part of the "standard unit" or original construction of each unit

Strata insurance does not usually include personal items and appliances that are part of a condo unit. It also does not cover the damages made by individual unit owners, such as in the case of water damage caused by a unit owner. These are usually covered by personal condo insurance.

Property types

Detached home: A detached home is your standard single-family home. It is a residential building that stands alone and is separately titled or legally a single unit.

Semi-detached home: A semi-detached home is similar to a detached home, except it shares a wall with another home. This pair of homes must make up an independent building and each should be separately titled or legally two separate units. There can only be two homes in a semi-detached building.

Townhouses: A townhouse is the middle between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units that have their own land and may be attached to other units. However, like condo apartments, they typically have to pay co-ownership fees for maintenance and may share some common features with their neighbors.

Condo apartment: This category includes all apartments and condominiums. These are complexes of residential units with common areas such as hallways, parking lots, stairwells, etc. They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the lot (the land of the building) where access is reserved for only one owner or occupant. There can be privately owned units and spaces inside the building.

Plexes are multi-story buildings with two to four individual units, usually one on each floor. They are a mainstay in Montreal and other cities in Quebec. Each unit is usually individually accessible via an external entrance with higher floors connected by staircases.

Property Classes

Freeholds: A freehold is any property where the owner owns both the house and the land it is built on. Common freehold property types include: detached, semi-detached, some townhouses, and farmland.

Condominiums: A condominium or condo is any property where the owner owns the home (or unit) but shares ownership of the land and other improvements with a condominium corporation. Common condominium property types include condo apartments and some townhouses.

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Data sourced from the Canadian Real Estate Association (CREA) and regional real estate boards. Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.