It is easy to forget that with places like Toronto and Vancouver seeing record high home prices, some other parts of Canada are not doing as well. While those two cities are reaching double digit levels of increases in home prices year-over-year, across Canada there has been only a slight increase in new home prices in December.
In a report released this past week, the new housing price index rose by .4 percent, which are the same increase seen the month before and exactly what the experts were predicting. Most experts saw the increase being .3 percent, so the country is doing better than thought. The rise in December was also the sixth straight increase in new home prices.
Across Canada, 21 cities were analyzed and only two saw declines during December. These two cities were Calgary and Victoria and both saw a fall of .2 percent. Across the water from Victoria, Vancouver saw a .7 percent increase in the new home index. The rest of the big gains were in the eastern part of the country. St. John’s, Oshawa and Toronto all saw .7 percent increases, while Ottawa led the country with an increase of .8 percent. The reason that Ottawa is doing well is because of the excellent market conditions and the high amount of competition in the area. In Toronto, the increase was seen because many builders were revising the value of their models and increasing their prices thanks to the strong market conditions.
The largest year-over-year increases were seen in Quebec City, which was up 6.9 percent for the year. St. Johns came in second with 4.6 percent, while Montreal saw an increase in 2.1 percent. In Western Canada, things were not as great. In Edmonton, there was a decline of 9.4 percent, while Calgary went down 3.1 percent. Saskatoon fell two percent and Victoria fell by 8.2 percent. While Vancouver has seen record gains from the tough months of 2008, just like Toronto, it saw a drop in home prices of 2.2 percent in total.
As we go through 2010, home prices will continue to rise and the housing market will continue to recover in markets like Toronto. Once June comes around, it may be a different story as the record low interest rate is increased by the Bank of Canada. At this point, the housing market will either increase into the fall, or it will collapse in an epic housing bubble. Only time will tell which of these realities will come into being.
Thanks so much for the info! Great article. Slow and steady seems to be what happening right now.
Ian