Housing prices overheating in some markets: survey
Housing markets across the country have been growing, but some of the major markets may have become overheated while others grew at a more moderate level, according to a national retail-sales organization.
The average prices for all key housing types rose more than 10 per cent on a national basis in the first quarter of this year, according to the Royal-Lepage House Price Survey.
BNN's Pat Boland said the numbers in Thursday's report point away from the idea that Canada is experiencing a housing bubble.
"People have been talking about bubbles in the real estate market, and those kinds of numbers across the whole country would indicate that that might not necessarily be the case," he told CTV News Channel Thursday.
Although the national housing prices have grown at a moderate rate year over year, the Royal-Lepage survey shows housing prices in Vancouver and Toronto continue to climb at a dramatic pace.
"That's really the concern in those particular areas, whether they're too hot," Boland said.
The Royal Lepage survey found that the average price of detached bungalows in Toronto was $459,107 in the first quarter of this year, up 13.3 per cent from a year ago.
The price of standard two-storey homes in the city rose at roughly the same pace to $562,150, up 13.2 per cent from last year. Condominium prices were slower to grow: condo prices rose 10 per cent to $317,579.
In Vancouver, the housing market rose even more dramatically. The average price of a detached bungalow skyrocketed 21.8 per cent to $906,045. Two-storey home prices rose 19.2 per cent to $987,500 and condo prices were up 15.7 per cent from last year at $470,000.
But not all major Canadian cities have seen the same growth in housing prices.
Average housing prices in Montreal rose about seven per cent, with the average price of a bungalow rising 7.2 per cent to $249,172, the average price of a two-storey home growing 7.6 per cent to $355,109 and the average price of a condominium rose 7.6 per cent to $222,244, according to the report.
Phil Soper, president and chief executive of Royal LePage Real Estate Services, said the differences in housing prices between cities shows a difference in the way consumers have responded to the recession.
"House sale data from the past two year period shows tremendous variances in terms of how different cities reacted to the recession," Soper said. "In Vancouver and Toronto, for instance, the dramatic unit sales fluctuations exhibit a significant degree of market irrationality: inordinately fearful when faced with poorer markets; and overly enthusiastic when the tables turned. Montreal is an example of a city where the market has been much more stable and homeowners there seem quite happy with the relatively slow pace of change."
According to the Royal-Lepage Survey, the average price of a detached bungalow in Canada rose almost 11 per cent from last year to $329,209 in the first three months of this year.
Two-storey home prices rose 10.3 per cent to $365,141 and condo prices rose 10.9 per cent to $228,963.
With files from The Canadian Press