Eleven major cities in Canada are there where house prices rose by 5.64% in this year to end Q3 2015 i.e 4.56% inflation adjusted, based on the figures came from Teranet i.e National Bank of Canada. This rise in price is increasing at very fast pace, with the annual growth in price of 4.73% in second quarter. Central Bank taken action again and again, but house prices are increasing tremendously as nothing can stop them.
Dire warnings are given to serious people who understand these matters. CMHC i.e Canada Mortgage and Housing Corporation recently cleared that major cities in Canada are making housing market more overvalued.
Bob Dugan, Chief Economist, CMHC told that 11 centers among 15 are fully covered by HMA (Housing Market Assessment ) for overvaluation. The CMHC showed its more concern about Toronto, where continuous hike in price of home has not been matchup by growth in demographic and economic fundamentals.
As per CREA i.e Canadian Real Estate Association:
- Average price has been increased by 9.07% of a two storey single family home as compared to September 2015.
- National average price also rose by 6.48% for a one storey single family home during September 2015.
- On an average Row houses/Townhouses price has been increased by 4.40%
- Apartment prices also increased by 4.22%
Canadian Real Estate Association noted that average price will rise nationwide which is mainly caused by number of sales increased in Greater Toronto and Greater Vancouver, these are Canada’s most expensive and active housing markets. If these two are get excluded 2.9% will get slowdown in annual average price.
There are big variations:
- Tight supply of housing in Greater Vancouver and GTA ( Greater Toronto Area) including low rates of interest which pushed their house prices towards upward.
- Oil price slump hit oil producing areas like Calgary which dragged the house prices down.
Eleven major cities of Canada rose house prices during end of September 2015. Hamilton housing prices rose most of 10.56% which is followed by Victoria, Toronto and Vancouver.
Housing prices in Ottawa , Calgary and Edmonton are less as comparatively to the other places in Canada. House prices also fell down in Montreal , Halifax , Winnipeg and Quebec.
Home sales are suppressed with lack of supply
Home sale in September 2015 fell down by 2.1% as comparatively to the last month, but it was 0.7% up as compared to the year ago. According to CREA (Canadian Real Estate Association).
More than the half of the local markets which experience fall down in sales during this period were especially Greater Toronto Area (GTA) , Calgary and Greater Vancouver. There was only one reason behind downfall in sales was that people don’t want to buy homes.
Gregory Klump, CREA’s Chief Economist said that there is a lack of supply in some areas of country which is likely to be kept in a lid on some transactions.
Klump added that Greater Toronto Area and Greater Vancouver made contribution to monthly fall in national sales. They rank the tightest housing market in urban sector in country due to shortage of Inventory.