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An April 2017 report shows what we already knew, but showed in numbers, the average house sale prices are declining in Vancouver and rising in Toronto.
Regardless of the decline in Vancouver, both East and West Coast buyers are moving out of the big cities and into more affordable areas.
RE/MAX recently produced a report that shows the change in house prices from the first quarter of 2016 to the first quarter of 2017 in cities across Canada.
Leger conducted a survey for RE/MAX which showed the common decision-making process for buyers.
According to Leger, more than two-thirds of Canadians consider the location of a home to be more important than the style or size of the home, and of course affordability is a main factor.
“If the price isn’t right, move-over buyers look to markets where they can find a better balance of affordability and square footage, and still have access to green spaces, transit options, and retail centres,” said Elton Ash, regional executive vice president, RE/MAX of Western Canada.
It's taken a while, but reports are showing that the Vancouver housing market has actually reached its peak and is now on the decline.
But the decline is happening a bit late, as buyers are already moving outside Vancouver and looking for housing in more affordable areas.
Many buyers are moving outside Vancouver and heading to Kelowna, Victoria and the Fraser Valley.
While reports show that Kelowna's average sale price increased by 13 per cent between Q1 of 2016 and Q1 2017, it doesn't seem to deter buyers, as the numbers still look better than Vancouver's declined average price.
The average sale price in Kelowna went from $447,416 to $504,643 in the past year.
According to the RE/MAX report, Vancouver hit its peak in May
During Q1 of 2016 and Q1 of 2017, Greater Vancover's average sale price decreased by 11 per cent. Prices went from $1,094, 936 to $969,900. One of the main contributing factors to this decline is BC's introduction of the foreign buyer's tax last August. It was announced earlier in 2016 but went into effect in August and before the month of August, buyers were already dropping out of the market.
Vancouver may not be the most expensive housing market in Canada, but it's still second on the list.
The Greater Toronto Area's suburban town, Oakville has surpassed Vancouver's average sale price and is on the rise.
During Q1 of 2016 and Q1 of 2017, Oakville's average sale price increased by 32 per cent from $997,353 to $1,313,477.
The Greater Toronto Area's average is not far behind the town of Oakville, with an increase of 29 per cent during the same period and prices moving from $675,492 to $873,631.
While Vancouver is stabilizing and people are looking elsewhere for affordable housing, the GTA is on the rise and there's no telling when it will reach its peak.
In attempt to stabilize the market, the Ontario government is following Vancouver's lead with the foreign buyers- tax and introducing a tax.
In April, the Ontario government announced a 15 per cent Non-Resident Speculation Tax (NRST).
“Toronto and Vancouver are very different markets as Vancouver’s population and geography are much smaller,” said Christopher Alexander, regional director of RE/MAX Integra for Ontario-Atlantic Canada Region.
“At this point there is limited data on how many foreign speculations are active in the GTA market, but it is fair to assume that the new tax will impact the middle-class and not just buyers in the upper-end of the market,” said Alexander.
Still, these prices are out of reach for many first-time home buyers.
First-time home buyers will have better luck in Calgary, Halifax and Windsor, Ontario.
If you're looking for the most affordable place to buy, Halifax, Nova Scotia or Windsor, Ontario are the places to look, with an average sale price of $240,000 to $280,000.
Alberta's oil prices are starting to come up again and low interest rates are also showing up with the US approval of the Keystone XL pipeline project.
In Calgary, the average residential sale price incrased by three per cent in a year. From the first quarter of 2016 prices moved from $482,065 to $467,780 in the first quarter of 2017.
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