Vancouver, Toronto trade places in housing market

Vancouver, Toronto trade places in housing market

In a reversal of fortunes from this time last year, Toronto is now driving real estate activity and prices, while Vancouver lags behind.

According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity edged up by less than one per cent (0.8) in April 2012, while the national average home price edged up year-over-year by 0.9 per cent to $375,810. Prices are higher, on a year-over-year basis, in 80 per cent of all local markets in the country. Sales were up 11.5 per cent from a year ago.

Activity was either up or held steady in half of all local markets in April, with Toronto and Calgary posting the biggest monthly increases for the second month in a row. Activity gains in Montreal, Winnipeg, Edmonton, as well as London and St. Thomas also made significant contributions to the national sales increase in April. Increased activity in these markets offset monthly declines in Ottawa, Windsor-Essex, Quebec City, the Fraser Valley, and Vancouver.

According to CREA’s chief economist Gregory Klump, the Vancouver market has cooled considerably since last year, when it skewed prices higher.

“Sales data confirm that high-end activity in Vancouver is well off the peak levels reached at this time last year, which is exerting a gravitational pull on the national average price,” he said.

By contrast, activity in Toronto is stronger this spring than it was last spring and is the biggest factor supporting national average price.

“Netting Vancouver out of the national average price calculation yields a 4.9 per cent year-on-year gain,” explained Klump. “Netting Toronto out of the national average price calculation, while leaving Vancouver in, produces a 2.2 per cent year-on-year decline. Netting out both Vancouver and Toronto results in a 3.1 per cent increase in average price. On balance, this points to modest price growth amid balanced market conditions in much of the rest of Canada.”