CANADA's 6 BIGGEST METROS
Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montréal Single Family Detached Housing as well as the National MLS Residential Annualized Sales and the Average Price of Vancouver, Calgary and Toronto Condos.
The chart above shows the average detached housing prices for Vancouver*, Calgary, Edmonton, Toronto*, Ottawa* and Montréal* (the six Canadian cities with over a million people each) as well as the average of the sum of Vancouver, Calgary and Toronto condo (apartment) prices on the left axis. On the right axis is the seasonally adjusted annualized rate (SAAR) of MLS® Residential Sales across Canada (one month lag).
- *Toronto GTA SFD prices began March 2009. Prior data are Combined Residential +24.5%.
- *Ottawa SFD prices began January 2009. Prior data are Combined Residential +6.9%.
- *Montreal SFD DATA changed from Average to Median in March 2007
- *Vancouver SFD data are HPI®, not Average.
In September 2018 Toronto metro SFD prices remain under resistance and 18 months since the March 2017 spike and peak price, they have lost $206,061 or 17% (Plunge-O-Meter). In Vancouver prices are no longer defying gravity as sales drop and inventory rises. FOMO and speculative pricing is still on in the strata sector in some neighborhoods, see Toronto.
Anyone owning a detached house in the scorching hot Vancouver market is sitting on an unredeemed lottery ticket while the Bank of Canada interest rate up-moves and stress testing at street level are thinning the crowd even more as can been seen by the plunge of the national annualized MLS sales plot that has dropped back into 2005 levels. The screw has turned.
When earnings drop so do asset prices. Wage earners needed to buy a single family detached house in: Vancouver: 3.5, in Toronto: 1.9, in Calgary: 1.0 and in Montreal: 0.8
It remains interesting to note that the combined average sum price of a Vancouver, Calgary & Toronto condo is currently 55% (no typo) more expensive than a median priced Montreal SFD. Montreal has more listing inventory available for sale than any of the other 5 biggest metros in Canada and used to have the lowest monthly absorption rate (15%) based on total listings and sales, but that metric is now held by Vancouver at 12% and should be a warning of impending changes in trend.
High net worth trophy hunters have spent the last few years picking off well located SFD properties in hot markets while the hoi polloi settled for anything before being "priced out". Are they going to enjoy being "priced in"?
CMHC was not so sure in November 2015 CMHC when they had a private audience in New York City and brought along a stress test of $35/bbl oil and its potential effect on Canada. I covered the bullet points here and here. The Department of Finance is also worried:
The age-related deceleration in economic growth in Canada will take place amidst other powerful, slow-moving global forces. As in Canada, the world population is aging and productivity growth (Canadian Productivity Chart bottom of this page) has slowed across OECD countries. These structural forces are paving the way to slower global growth for the next number of years. Slower nominal GDP growth will thus reduce the growth rate of government revenues, thereby limiting the capacity of governments to continue to maintain the growth rates of public expenditure at levels as high as in the past. At the same time, population aging is also expected to put upward pressure on public expenditure, notably for age-related programs such as elderly benefits. Department of Finance Canada December 2016