Canadian Housing Market News

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Current Date: 18 September 2020

Canada Real Estate Market Overview

Transactions

62,553
14%
vs. Jun 2020
30%
vs. Jul 2019

Average Selling Price

$571,471
6%
vs. Jun 2020
15%
vs. Jul 2019

MLS® Home Price Index

249.6
2%
vs. Jun 2020
7%
vs. Jul 2019

Over the last decade, the Canadian real estate market has been one of the hottest real estate markets in the world. Fueled by Canada's status as an immigration hotspot as well as factors including low unemployment and low interest rates, the Canadian real estate market has appealed to both domestic and international buyers.

July marked the third consecutive month of growth in the Canadian real estate market since the onset of COVID-19. Despite the initial decline in March and April, average selling prices and number of home sales have broken new record highs with 15% and 30% year on year increases, respectively. The largest increases were in localities that had already experienced rapid growth in the past few years: Montreal, Ottawa and the Greater Toronto Area. Despite the decline of resource sector, home sales in Calgary have also recovered to pre-COVID levels. Similarly, home prices in Vancouver and the rest of British Columbia have witnessed month on month increases despite restrictions on foreign buyers.

Canada Real Estate Market Trends

Growth in demand for homes has led to historical lows in housing inventory, or the amount of listed homes available compared to the rate of transactions. This surge in demand and prices may be driven by record-low mortgage rates and increased flexibility in the mortgage stress test, enabling more Canadians to buy more expensive homes with the same monthly payments. In addition, the impact of COVID-19 has been suppressed by the Government of Canada's CERB and CEWS programs which have supported Canadian household employment and incomes. The Bank of Canada has also launched quantitative easing programs that have injected money into the economy and decreased the cost of capital for major banks and financial institutions.

What is the MLS® Home Price Index?

Breakdown By Region

Greater Toronto Area Housing Market

Transactions

-3%
vs. Jul 2020

Avg. Selling Price

1%
vs. Jul 2020
Toronto Real Estate Report and Forecast
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Montreal Metropolitan Area Housing Market

Transactions

8%
vs. Jun 2020

Avg. Selling Price

6%
vs. Jun 2020

Greater Vancouver Area Housing Market

Transactions

-3%
vs. Jul 2020

MLS Benchmark Price

1%
vs. Jul 2020
Vancouver Real Estate Report and Forecast
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Ottawa Housing Market

Transactions

7%
vs. Jun 2020

Avg. Selling Price

46%
vs. Jun 2020
Ottawa Real Estate Report and Forecast
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City of Calgary Housing Market

Transactions

5%
vs. Jun 2020

Avg. Selling Price

1%
vs. Jun 2020
Calgary Real Estate Report and Forecast
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City of Edmonton Housing Market

Transactions

10%
vs. Jun 2020

Avg. Selling Price

2%
vs. Jun 2020

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.

All Residential Properties

Prices for residential properties in Montréal, Ottawa, Toronto, Calgary, Vancouver, and Victoria increased by 4.4% year over year in the first quarter of 2020. The biggest increases were seen in Ottawa, where home prices have risen by 13.2% compared to Q1 2019. The capital city is expected to remain strong amidst COVID-19 due to its economic stability and high availability of government jobs. Calgary, on the other hand, has faced a decline in home values at least partially attributed to falling oil prices and decreased local investment.

Condominium Apartments

Prices for condo apartments in Montréal, Ottawa, Toronto, Calgary, Vancouver, and Victoria increased by 9.2% and 5.5% year over year for new and resale condo apartments respectively. This growth outpaces the overall average of 4.4% for all properties types. The biggest increases were seen in Ottawa, where prices have risen by 16.9% compared to Q1 2019. Toronto is second with year over year increases of 11.2% despite the impact of COVID-19. Calgary and Vancouver both faced year over year decreases of 5.7% and 1.2% respectively. Calgary's decline is likely due in part to falling oil prices while Vancouver's decline is seen as related to B.C.'s speculation and vacancy taxes.

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.

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: 2.2% (2019)

Housing Construction

Housing Starts: 51,228 units (Q2 2020)

Housing Under Construction: 274,394 units (Q2 2020)

Housing Completions: 46,664 units (Q2 2020)

Investment in Residential Construction: CAD $8.4 billion (Q2 2020)

Investment in Non-Residential Construction: CAD $4.9 billion (Q2 2020)

Average Rent for a 2-Bedroom Unit

As reported by Statistics Canada and the CMHC

Greater Toronto Area, ON: $1,562 (2019)

Ottawa, ON: $1,410 (2019)

Vancouver, BC: $1,748 (2019)

Victoria, BC: $1,448 (2019)

Quebec City, QC: $862 (2019)

Montreal, QC: $855 (2019)

Edmonton, AB: $1,257 (2019)

Calgary, AB: $1,305 (2019)

Winnipeg, MB: $1,223 (2019)

Saint John, NB: $797 (2019)

Charlottetown, PEI: $937 (2019)

Halifax, NS: $1,202 (2019)

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.

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.

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.