According to the Royal LePage House Price Survey1, Canada's residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017.
While year-over-year aggregate appreciation remained high in the Greater Toronto Area (GTA) and Greater Vancouver, two-storey and bungalow home values softened in the GTA, slightly declining on a quarter-over-quarter basis. Meanwhile, in both Greater Vancouver and the GTA, condominium prices continued to outpace all other property types, primarily due to growing affordability constraints within these markets.
The Royal LePage National House Price Composite, compiled from proprietary property data in 53 of the nation's largest real estate markets, showed that the price of a home in Canada increased 10.8 per cent year-over-year to $626,042 in the fourth quarter of 2017. When broken out by housing type, the median price of a two-storey home rose 11.1 per cent year-over-year to $741,924, and the median price of a bungalow climbed 7.1 per cent to $522,963. During the same period, the median price of a condominium appreciated faster than any other housing type studied, rising 14.3 per cent to $420,823 on a year-over-year basis.
"To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability," said Phil Soper, president and CEO, Royal LePage. "This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations."
"Historically, condos have appreciated at a slower pace than detached homes, simply because supply constraints are easier to address, building upward uses much less precious land. For now, demand for those relatively affordable spots in the sky is so high that the trend has been reversed. As builders respond, new projects will come on-stream and condominium price increases will moderate somewhat. However, without hesitation, we can say Canada is now a condo nation, like other advanced economies around the world."
In line with the company's previous Market Survey Forecast, Royal LePage predicts that the price of a home in Canada will increase 4.9 per cent by the end of 2018. In the country's largest markets, Royal LePage expects home price gains in the Greater Montreal Area, Greater Toronto Area and Greater Vancouver to grow by 5.5 per cent, 6.8 per cent and 5.2 per cent, respectively. Meanwhile, by the end of 2018, appreciation in Calgary and Regina is expected to slow slightly on a yearly basis to 2.3 per cent and 0.7 per cent, while Edmonton is forecast to depreciate modestly by 1.5 per cent over the same period. Royal LePage also reported 2018 forecasts for Halifax, Ottawa and Winnipeg, where it foresees home price increases of 2.5 per cent, 3.2 per cent and 4.0 per cent, respectively, in these markets.
To view the chart with aggregated regions and markets visit royallepage.ca/houseprices
For more information see royallepage.ca/mediaroom
1 Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions.