Canada’s real estate market grew during Q3, according to Royal LePage’s report, entitled Canada’s Housing Market Continues to Expand in Third Quarter in the Face of Regulatory Headwinds, released Thursday morning.
According to the agency’s proprietary National House Price Composite, comprised of data in 53 of the country’s largest markets, the average Canadian home price increased 12% to $545,414 during the quarter.
The average two-storey home price increased 13.7% to $649,635, and the average condo increased 5.8% to $360,679.
Vancouver’s price growth contributed to that but that trend is expected to end, according to Royal LePage.
“In what may be a final hurrah for this expansionary cycle, Greater Vancouver posted another quarter of unsustainably high price appreciation,” Phil Soper, president and chief executive officer, at Royal LePage said. “Our widely followed house price composite showed that the median value of homes in the tiny West Vancouver suburb increased by nearly forty percent – or an astonishing million dollars – year-over-year.
“That said, relief appears to be on the way. For months, the number of homes trading hands has been slowing on eroding affordability. And, slower sales volumes lead to moderating prices.”
Concerning the recent mortgage rule changes, Royal LePage said consumer sentiment took a hit.
However, it also argues lender fears may be overblown.
“Consumer confidence suffered a direct hit when the federal government introduced new, more restrictive regulations in early October,” said Soper. “While it is too early to say definitively, it appears Canadian homebuyers are adjusting quickly, and that fears of a hard correction were unwarranted. While the changes are significant, major lenders may already be using similar criteria when writing mortgages in sensitive regions like Alberta and B.C., so the additional drag on the market resulting from the new legislation won't be as great as it appears on the surface.”
The impact of Vancouver’s foreign sales tax; impressive growth among Canada’s largest markets; and the impact of Morneau’s housing measures – those and everything else industry players need to know about the comprehensive report