You know all those rumours of a looming housing market crash in Canada? Well, according to the Canadian Real Estate Association (CREA), they’re still just rumours. Houses across the country continue to sell at a torrid clip, with the average price of a home in Canada now topping $430,000. The organization did, however, lower projections for the Prairie provinces as a result of slumping oil prices.
B.C. and Toronto Continue to Lead the Way
Supply and demand are the two basics of economics behind housing prices and in Ontario and British Columbia, the latter continues to outstrip the former. The Bank of Canada’s surprise quarter-point rate drop in January – with the banks eventually following suit – should combine with ongoing demand to see housing prices in the two regions continue to climb faster than inflation. Year-over-year, prices in Toronto were up 7.84 per cent while in Vancouver they rose 6.38 per cent.
Prairies in For Demand Downfall
It should come as no surprise that the dramatic drop in oil prices – and the resulting slowdown in Alberta’s oil sands projects – has had an impact on the local housing markets. “A number of buyers across the Prairies stayed on the sidelines in February,” said CREA president Beth Crosbie in a press release.
On March 16, BuildForce Canada, a national construction industry association, issued a report on the impacts of dropping oil prices on construction in Alberta. They project a three-year decline in construction, including new housing starts.
“While it’s early to pinpoint when that will happen, our forecast projects a near-term recovery, with jobs in engineering construction rising gradually from 2018 to 2024, as oil prices come back up,” says Rosemary Sparks, the executive director of BuildForce Canada.
Still, it’s not all bad news for Calgary homeowners. Year over year, their homes had climbed in value by 5.96 per cent. Of course, the bulk of that occurred before oil prices dropped.
The Numbers Game
Other key stats from the CREA’s latest report:
•National home sales edged up 1 per cent from January to February.
•The number of newly listed homes fell 2.5 per cent from January to February.
•The national average sale price rose 6.3 per cent on a year-over-year basis in February.
•If you remove Toronto and Vancouver from the figures, the average drops to $326,910 and the year-over-year gain shrinks to 1.5 per cent.
•Sales in Quebec and Atlantic Canada are expected to be relatively stable.
•Total nationwide home sales are projected to be 475,700 in 2015, a 1.1 per cent drop from 2014.