A short month with no shortage of headlines.
Welcome to February’s Real Estate Roundup. It may have been the shortest month of the year, but there was still plenty of long talks about the state of Canada’s real estate markets. Here is this month’s Real Estate Roundup:
When Canadians hear “affordability crisis,” the last thing they’d expect to learn is that down payments from first-time home buyers have reached record highs between 2014 and 2016. This was the key finding from Mortgage Pros Canada’s report on the state of the residential mortgage market in Canada. Though, as Better Dwelling notes, the report fails to segment its findings based on markets. And a 21% down payment looks a lot different in Vancouver than it does in St. John’s.
Joseph Dahmen, an Architecture professor at the University of British Columbia, predicts that one-quarter of all detached homes in Vancouver are at risk of being torn down between now and 2030. His prediction was informed by a collaboration with mathematician Jens von Bergmann, who helped him develop a metric known as the “teardown index.” This index compares the value of land to the value of the home built on top of it.
With double digit dips in almost all categories this January compared to last, The BC Real Estate Association is claiming that BC’s housing market is righting itself to what it calls historic, long-term averages. Housing sales were down 23%, total sales value dropped 36.5% and the average price of a home is also down 17.5%.
But despite the cloud of question marks hovering over Vancouver’s housing market, the price of a condo in the Greater Vancouver Area has risen, albiet by just 0.4% compared to last month. That said, the average $512,300 price tag of a Vancouver condo still represents a 15.6% rise year over year – still higher than Toronto’s “scorching hot” market which saw a rise of 14.5% over the same period.
More on Toronto’s “scortching hot” market: many experts are cautioning home buyers that the market is a runaway train – and it may be coming to a screeching halt. Based on factors like a shortage of supply and the blistering speed at which sales are happening (new listing sold in an average of 19 days in January), authorities such as Chris Kapches of Chesnut Park Real Estate Ltd. and the Bank of Montreal itself are warning home-buyers that Toronto’s housing market is in a bubble.
That was February, in broad strokes. Stay up to date and sign up for the Tri City Report on Real Estate, Mortgages and the Economy.