Is Canada’s housing market overvalued or in a bubble? Despite climbing at an annual rate of 4.4%, many have been predicting a correction—but as Canadalend.com observes, it hasn’t materialized.
FitchRatings stated recently that it believes the Canadian real estate market is 20% overvalued, while rating agency Morningstar predicted that a 30% correction could happen over the next few years. Despite widespread fears that the Canadian housing market is overheated and ripe for a correction, the fact of the matter is that the broader Canadian real estate market is fairly well-balanced. And the huge month-over-month increases are being skewed in large part by three markets: Toronto, Calgary, and Vancouver. It would be more than just a little unfair to view the country’s real estate market from that limited viewpoint.
Nationally, Canadian real estate prices rose 6.9% year-over-year in June to $413,215. Of the $21.2 billion in activity for the month, roughly half can be attributed to Toronto, Calgary, and Vancouver. If you take Toronto and Vancouver out of the mix, the national average home price falls $77,000 to $336,000.
For example, the average selling price for a Toronto residence in June was up 7.1% year-over-year at $568,953. In Calgary, the average selling price jumped 5.5% to almost $467,000, while in Vancouver, the average selling price climbed 4.4% to $796,714. Finally, in Hamilton, the average price of a home increased 4.09% to $409,000.
But it’s a different story elsewhere. Regina home prices averaged $307,800 in June, a 0.4% decline year-over-year. Prices have also cooled in Halifax, where they average $275,000, and Quebec City, which averages $268,000. In Montreal, the average sales price inched up 0.9% to $332,462, while the average sales price in the nation’s capital, Ottawa, was up a modest 1.7% at $365,366.
Major price movements in Toronto, Vancouver, and Calgary are attracting all of the headlines, but the fact of the matter is that housing continues to be affordable in almost every region.
First-time home buyers looking to take advantage of low interest rates or interested in seeing just what kind of mortgage they qualify for should contact an independent, licensed agent at Canadalend.com.
Not only will a Canadalend.com agent help you find out what you can afford, but they will also get you the best mortgage possible.
The mortgage experts at Canadalend.com will help you get pre-approved for a mortgage in 24 hours or less. The pre-approval rate lasts for 120 days and protects you if interest rates rise while you’re looking for your dream home. To help you get the mortgage best suited to meet your lifestyle and financial needs, a Canadalend.com agent will draw from hundreds of banks and lenders.
Interested in seeing what kind of mortgage you qualify for? Contact Canadalend.com or apply online and a mortgage specialist will set up an appointment with an independent, licensed Canadalend.com agent at your earliest convenience.
Marr, G., “Ratings agency Fitch calls for more government action in ‘overvalued’ Canadian housing market,” Financial Post, July 14, 2014; http://business.financialpost.com/2014/07/14/canada-housing-maket-fitch/.
McMahon, T., “Why Canada isn’t immune to a U.S.-style housing crash,” Macleans, July 10, 2014; www.macleans.ca/economy/realestateeconomy/why-canada-isnt-immune-to-a-u-s-style-housing-crash/.
“Canadian home sales edge higher in June,” The Canadian Real Estate Association web site, July 15, 2014;http://crea.ca/canadian-home-sales-edge-higher-june .