Home prices rise as supply shrinks

by Gerv Tacadena on 19 Feb 2020

Home prices in Canada went up in January as housing supply continued to shrink, according to the latest market report from the Canadian Real Estate Association (CREA).

CREA's home price index rose by 0.8% in the month, clocking its eighth consecutive monthly gain. Home prices across Canada have increased by 5.5% from their lowest point in May last year.

On a yearly basis, home values grew by 4.7%, posting their biggest gain since February 2018. 

Prices in Greater Vancouver are improving slightly, although they remain below year-ago levels. Fraser Valley, on the other hand, rebounded from the decline to post a 0.3% gain in prices.

Okanagan Valley, Victoria, and Vancouver Island all posted price growths of up to 4%.

Regina recorded a wider price gap after it witnessed a 6.9% decline in values for the month. Small declines were also observed in Calgary, Edmonton, and Saskatoon.

In Ontario's Greater Golden Horseshoe, home values continued to get closer to double-digit increases. Ottawa, Montreal, and Moncton also remained strong, with prices growing from 6.4% to 13.7%.

In terms of housing type, apartment units posted the biggest yearly gain in prices at 5.5%. Two-storey single-family homes followed with a 4.8% increase. Townhouses, row units, and one-storey single-family homes also registered growth in values.

The increase in house prices across most of the major markets can be attributed to the tight housing supply, said CREA president Jason Stephen.

"Home price growth continues to pick up in housing markets where listings are in short supply, particularly in Southern, Central and Eastern Ontario," he said. "Meanwhile, ample supply across the Prairies and in Newfoundland and Labrador is resulting in ongoing competition among sellers."

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