Housing market softening everywhere but Toronto and Vancouver

The much-ballyhooed “soft landing” in real estate may already be underway, Bank of Montreal says, as booming price gains in two of Canada’s three biggest housing markets are the exception rather than the rule in the rest of the country.

While the closely watched national average price figure released on the 15th of every month by the Canadian Real Estate Association is still showing strong annual gains, “strong gains have been entirely a Toronto and Vancouver story,” BMO economist Robert Kavcic says in a research note today.

The latest CREA numbers, released last month, show the national average ticked up another six per cent in March to $431,812.

But there’s much more weakness than that headline figure would suggest.

In three-quarters of the 26 biggest metropolitan areas in Canada, average gains top out at about four per cent, and are actually contracting in many places.

“Suffice it to say that strong Canadian home price gains are now almost purely a two-city phenomenon, and the so-called soft landing (harder in Alberta and Saskatchewan) is well underway across most of the country,” Kavcic says.

Montreal, Canada’s second-largest real estate market, is one of the areas where the average house price across all categories of housing is already in decline, with the MLS HPI down 0.3 per cent in March, according to CREA.

Moncton, N.B., and Regina are also in negative territory.

House prices across all types had been trending downward in Ottawa since the spring of 2014 before an uptick last month. And average house prices in Newfoundland declined by more than eight per cent in February compared to a year ago, CREA data shows.

Although it’s still in the black on an annual basis, new data out of Calgary on Thursday shows that city’s average house price has now declined for two months in a row as the impact of cheap oil filters through the broader economy.

Source: Pete Evans, CBC News

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