With Vancouver actually declining by 1 per cent and Toronto seeing virtually no increase in home sales, April 2016 marked the second straight month of relatively weak performance in these traditionally dynamic cities (Vancouver slowed by 0.3 per cent and Toronto number fell by 1.8 per cent on March).
“Activity in Greater Vancouver and the GTA appears to have topped out,” CREA president Cliff Iverson told The Huffington Post Canada
These developments have not appeared to impede price growth in any way, however, with the benchmark value shooting up by 25.34 per cent in Vancouver (up to $844,800) and 11.6 per cent in Toronto (to $614,700) on a year-over-year basis in April.
“While significant home price gains may entice some homeowners in these markets to list their home for sale, the issue for many is that the decision to move means they would also be looking to buy while competition for scarce listings is fierce,” CREA chief economist Gregory Klump explained.
“As a result, many homeowners are deciding to stay put and continue accumulating capital gains. That’s keeping listings off the markets at a time when they are already in short supply,” Klump added.
In a client note, TD Bank economist Diana Petramala said that these trends point toward diffusion of growth to the peripheries of Canada’s two most in-demand cities, which might feed into even stronger numbers for B.C. and Ontario down the line.
“The average price for a home has risen by more than $100,000 in Vancouver and Toronto over the last year, putting them increasingly out of reach for the average buyer. As such, we expect demand to continue to spread out into their surrounding areas,” Petramala wrote.
Recent figures indicate that activity in long-time real estate powerhouses Vancouver and Toronto has started leveling off, according to the Canadian Real Estate Association (CREA).