High demand and low supply continued to characterize Vancouver’s and Toronto’s housing markets throughout 2015 as competition from buyers over the limited inventory of single-family homes pushed prices higher.
The average residential sale price increased 17 per cent in Greater Vancouver and 10 per cent in the Greater Toronto Area, to approximately $947,350 and $622,150, respectively. As demand shows no signs of waning, these markets are expected to continue to see price appreciation in 2016, of seven per cent in Greater Vancouver and five per cent in the Greater Toronto Area.
In these competitive markets, sellers want to ensure they maximize the value of their homes, while buyers look for guidance during the fast-paced bidding process. In a recent Leger survey conducted for RE/MAX, 70 per cent of homeowners agreed REALTORs® provide value when buying or selling a home.
Regions outside of Canada’s highest-priced cities reported a spillover effect from the price increases in Greater Vancouver and the Greater Toronto Area continuing a trend that RE/MAX reported this spring. There were significant year-over-year price increases in Victoria (13%), Fraser Valley (10%), Hamilton-Burlington (12%) and Barrie (8%).
New Canadians and foreign investors continued to be an important demographic of buyers in Toronto, Vancouver and Montreal. Attracted to Canada’s stable economy and low Canadian dollar, this trend is expected to continue through 2016.
In Alberta, a year after the sudden drop in oil prices, housing markets in Calgary and Edmonton showed slower activity but haven’t experienced significant price adjustments. The average residential sale price in Calgary saw a five per cent decrease, due primarily to a larger proportion of sales at the lower end of the market. In Edmonton, the average price increased by two per cent despite more inventory on the market. An ongoing $5 billion development project in downtown Edmonton has stimulated the local economy and helped to keep employment levels up, mitigating the impact of oil industry layoffs. As buyers in these markets continue to feel uncertain, the average sale price is expected to decrease in 2016, by 3.5 per cent in Edmonton and four per cent in Calgary.
Outside of B.C. and Southern Ontario, high inventory continued to be a significant factor affecting the markets in many cities, including Saskatoon, Regina, Montreal, Quebec City, Halifax and St. John’s. This is primarily due to a period of increased construction. Though new construction slowed down in most of these cities, it will take some time for the market to absorb the product.
RE/MAX 2016 average residential sale price expectation for Canada is an increase of 2.5 per cent as Canadians continue to see home ownership as an important milestone as well as a good investment.
The drop in oil prices has led to uncertainty in Edmonton’s housing market. Listing inventory is up, as newly built homes and condominiums compete with resale properties in a buyer’s market. Average days on market increased from 43 in October 2014 to 57 in October 2015, and there was a 5.8 month supply of inventory on the market as of Oct. 31. Despite higher inventory, the average residential sale price is up slightly year-over-year, from $367,038 in 2014 to approximately $373,450.
While the market has seen a shift over the past year, an ongoing $5 billion development project in downtown Edmonton has stimulated the local economy and helped to keep employment levels up. Potential buyers have been cautious this year as they wait to see how the economy will shift over the next several months.
The first-time buyer market in Edmonton has shifted over the past few years. There are fewer single potential buyers moving to the city for high-paying jobs and purchasing on their own. Now, first-time buyers tend to be young couples or families. These first-time buyers typically enter the market by purchasing a home in the $350,000 range, which could be a half-duplex in an established neighbourhood closer to downtown, or a newer house in the suburbs.
Condominiums have been more affected by the downturn in the housing market than detached homes. There is a good supply of condo inventory on the market, due to significant development over the past several years. In 2014, 67 per cent of condo listings were sold, whereas from January to October of this year, only 49% were sold. While sales of condo units are down year-over-year, the average price remains stable. The average 2015 sale price for a condo at the end of October was $252,956, on par with the 2014 average of $252,159.
Edmonton’s luxury market has been slower this year. There is good selection for potential buyers as there are higher inventory levels than in other segments of the market. This is due to new construction that has recently come up for sale.
To read more about the housing market outlook in other provinces in Canada, please visit: