Variances continue to manifest in the performance of Canada’s most desirable markets, and nowhere is this more apparent than the diverging paths that Toronto and Vancouver have seemingly started to take as of last month.
Covering the whole of October 2016, the latest Teranet
home price index revealed that the cost of owning a home in Toronto increased by a record-breaking pace of 17.4 per cent compared to the same month last year.
But while Vancouver prices exhibited greater year-over-year growth at 22.5 per cent, sales numbers have suffered an unprecedented 40 per cent decline since February, “trending below their decade average,” according to Bank of Nova Scotia
senior economist Adrienne Warren.
“A severe lack of affordability compounded by recent policy changes has curtailed both domestic and foreign purchases, most notably for single-family homes,” Warren wrote in a report Monday (November 14), as quoted by The Globe and Mail
“Sales should continue to decline in Vancouver due to the new rulings,” National Bank economist Marc Pinsonneault agreed in his commentary, which came with the release of the Teranet index.
“We expect home prices to decline 10 per cent over all (20 per cent for detached dwellings) over the next 12 months,” he predicted.
And for all the buzz around the differences between Canada’s two hottest cities, the Toronto housing market may suffer the same languid fate that Vancouver is now facing.
“Given increasingly stretched affordability, we expect the latest tightening in mortgage qualifying rules will lead to a cooling in GTA housing demand over the coming year,” Warren cautioned in her forecast.
“At the same time, severely constrained supply - the ratio of sales to new listings climbed to a seven-year high in September - will likely keep upward pressure on prices in the near term.”