Ontario Property Prices Outpaced Rest of Canada in December: CREA

Ontario Property Prices Outpaced Rest of Canada in December: CREA

By: Zoocasa

 

Ontario property price growth continued to lead the nation last month, according to the latest data report from the Canada Real Estate Association (CREA), along with promising developments in BC and Quebec.

 

“The momentum for home price gains picked up as last year came to a close,” said Gregory Klump, CREA’s chief economist. “If the recent past is prelude, then price trends in British Columbia, the GTA, Ottawa and Montreal look set to lift the national result this year, despite the continuation of a weak pricing environment among housing markets across the Prairie region.”

 

Ottawa Sees Largest Price Increase in Province

 

Homes for sale in Ottawa experienced the biggest annual price jump of all the 19 markets CREA tracks, climbing 12.26% to $450,900. Prices in Hamilton (6.73%), Oakville (4.35%), Guelph (7.03%) and Toronto (6.9%) all experienced less dramatic, but still impressive gains.

 

Southern Ontario cities also saw a lot of action; the London St. Thomas Association of Realtors reported that  Homes for sale in London, Ontario jumped an incredible 16.1% to an average selling price of $426,539. (CREA prefers to use benchmark prices as it’s more reflective of the typical price since it excludes the most and least expensive from the calculation).

 

A Growing Supply-and-Demand Gap

 

Low supply and high demand are among the main factors behind increasing property prices in Ontario. Demand from a huge increase in the number of international students, domestic immigration from other parts of Canada, and natural population growth from millennials starting families provides a continual drip of prospective buyers. At the same time, new listings have shrunk and inventory levels are extremely low.

 

In contrast, the Prairies are still suffering from an excess of inventory and a weak economy due to declining oil prices.

 

Calgary (-1.1%) , Edmonton (-2.09), Regina (-4.52%) and Saskatchewan (-1.36%) all posted losses from 12 months ago, although the drop is less severe than it has been over the last few years.

 

British Columbia is also experiencing a decline, although it is likely a short-term dip, brought on by government intervention and new vacancy and foreign buyer taxes.

 

While  Vancouver is still the most expensive city in the country, prices there dropped 3.19% to $1,017,300 year over year. The Lower Mainland (-2.87%) and Fraser Valley, (-2.24%) also declined, while other parts of British Columbia  such as Vancouver Island (4.21%), Victoria (2.36%) and the Okanagan Valley (3.86) increased slightly.

 

Overall, benchmark prices rose slightly over inflation by 3.28% to $643,700 from 12 months ago.

 

Canadian Listings Inventory is Dropping

 

It’s likely that prices across the nation, perhaps in even the Prairies, will post strong gains in 2020. That’s because supply is scant — active listings are at a 12-year low and there are just 4.2 months of inventory left from a national perspective — the lowest level since the summer of 2007 and far below the long-term average of 4.3 months. That means that if sales continue at their current pace, all available homes will be gone in 4.2 months.

 

Sales have not dropped in lockstep with listings — they have, in fact, increased by 22.7% year over year. As long as demand continues to outstrip supply at this level, prices will be under pressure to rise.

 

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