The slowdown of Vancouver home sales has helped affordability a bit, but we’re still the country’s costliest market by far.

Royal Bank research shows “Housing affordability improved in the Vancouver area for the first time in almost three years” during the fourth quarter of 2016. It says the slowdown in home resales that began last spring had a “cooling effect” on prices for single-detached homes by late in the year. The bank’s economists say the affordability of houses improved the most since the first quarter of 2009 when Canada was in a recession due to the financial crisis.

Nonetheless, RBC says it takes 84.8 per cent of the median household income to pay the costs of owning the average detached bungalow in Vancouver.

Condos are a different story, with RBC saying “No such affordability relief took place.” Its measure of condo affordability worsened slightly for the seventh quarter in a row. Condos costs are at 46.1 per cent of household income.

RBC also says there are signs that “affordability stress” is spreading to regions near Vancouver and Toronto, including Victoria which the bank says “has experienced booming demand in the past year which has propelled prices significantly higher,” pushing its afforability measure “well above its long-term average.”

Source: Richard Dettman, News 1130
http://www.news1130.com/2017/03/30/vancouver-still-number-one-unaffordable-homes-rbc/

Metro Vancouver’s residential real estate story was a tale of two halves in 2016.

There were scorching sales leading into summer, a cooling off, and then a marked retreat after the province imposed a 15 per cent foreign buyers tax in August.

Many big-picture pundits say it will take another six months or more to fairly assess the impact of the tax. Others point to falling sales, and in some cases prices, as a small number of deals eke on.

Despite this, in 2016, Vancouver residential prices moved up 18 per cent, according to the Real Estate Board of Greater Vancouver’s composite benchmark price report released on Wednesday. Most of the gains were notched in the first half of the year, with the index moving back 2.2 per cent in the second half, according to the board’s report.

The number of sales — including detached houses, condos and townhomes — came in as the third-highest on record for Vancouver in 2016, falling 5.6 per cent from a record year in 2015.

Digging into the latest report, there are early signs of a bounce if you look at median prices. With so few listings, and as such, sales, some prefer to use this gauge, which means the “in the middle price” where half the homes sold went for above this mark and half for below as opposed to taking the average of only a handful of sales, where the result could be easily skewed by one very expensive or slumped sale.

For example, the median price for detached homes is steadying because it has been sitting in the $1.275 million to $1.3 million range for the last four months. Meanwhile, the median price for town homes, at $659,000, is now nearly at its June peak median price of $666,000. Condo median prices show an even stronger stride, hitting a new high of $495,000.

To put the slowdown into perspective, consider Knight Frank’s latest Prime Global Cities Index, which tracks the prices of the top five per cent of homes in metro areas of 35 cities around the world. Vancouver outstripped all other contenders in 2015 and in September 2016 it was still at the top, posting a 32 per cent change year-on-year.

Knight Frank’s Global Residential Cities Index — which more widely tracks “city house prices” in 150 locations — showed Vancouver was the highest ranking city outside of mainland China.

“Urbanization and rising household wealth are behind the surge in Chinese prices,” wrote Knight Frank researcher Kate Everett-Allen. “Vancouver, a longtime front-runner, slid down the rankings this quarter, from fifth to ninth position. This shift is not as a result of slowing prices, annual growth is much the same as in June, close to 24%, but due to the phenomenal ascent of the Chinese cities which have supplanted it.”

Overall, house prices increased in more than 75 per cent of the 150 cities surveyed, year-on-year, but only in 13 of them did the increase in prices exceed 20 per cent. Victoria, B.C. just missed being one of those cities on the list, coming in 15th on the list with an 18 per cent gain.

It’s an “interesting report. I really like the global comparison that it facilitates,” said Andrey Pavlov, who specializes in real estate finance at Simon Fraser University’s Beedie School of Business. However, he cautioned that: “First, the data is as of end of September, 2016. This was still very close to the peak, which occurred around June or July. Second, the report uses year-over-year increases, and all of the Vancouver increases occurred earlier in 2016, and some in 2015. With this in mind, the report captures historical trends, but does not really address the recent developments in our market.”

Source: Joanne Lee-Young at Postmedia
http://www.theprovince.com/business/real-estate/vancouver+home+price+gains+still+among+world+highest/12645598/story.html

When property prices are rising, even just a little, there is almost no better place to keep your money than invested in your own home.

Monthly real estate numbers released Friday show the price of the average Canadian home rose again in September, up almost 10 per cent in the past year. But if and when that trend reverses and prices turn flat or start to fall, the investment advantages of owning a home can take a dramatic turn for the worse. The reason is tax.

At various times in the past, different governments have decided that having citizens own their own homes was a good thing, worth encouraging with tax breaks.

In the U.S., the government decided the way to encourage and reward home ownership was to sweeten the pot by allowing buyers to deduct their interest costs from their taxable income.

That effectively means lower costs in the early stages of home ownership when interest costs are high. In fact, one U.S. home ownership strategy is to pay off a house very slowly, since the interest costs are subsidized by government.

In Canada, the federal government chose a different policy tool to accomplish a similar result.

Instead of giving you a deduction for your payments, the Canadian tax department saves up the entire tax break for when you sell your family home. If during the years you own the property, the value increases, that gain is tax-free.

Earlier this month, Finance Minister Bill Morneau announced changes in the law to try to deny foreign buyers the tax break. Under the old rule, when you sold your principal residence you didn’t even have to mention it to the tax department.

Just as U.S. interest tax deductions affect how people buy and pay off their houses, the Canadian policy has its own consequences.

When property prices are on the way up, rising more than 20 per cent in a year as they have in Toronto and Vancouver, for tax purposes, there is almost no better place to keep your money.

In fact, a good tax strategy might be to buy a house with the biggest mortgage you can afford the payments on. The law can also make it a good strategy to up-size when you can afford it.

The math is clear. If you put down $100,000 on a million-dollar home, and get a $900,000 mortgage for the rest, you own 10 per cent of the house while the bank owns 90 per cent. But if that $1 million home goes up in value by 20 per cent, the bank doesn’t get a share of that increase — all of the capital gains are yours.

Sell, and you’ve just turned a $100,000 investment into $300,000, tax-free.

That’s also why there are so many contractors who buy a house and keep it for a year while they fix it up for resale. Not only do they get the standard capital gains that other sellers get, if they do a good job on the renovation, they get an added premium, and by claiming the house as a principal residence, all the money they earn is free of tax.

The capital gains tax also affects elderly homeowners. While house prices are rising, retired people, especially the well-heeled, have little reason to sell their houses and downsize. Capital gains on their houses are tax-free, but the income from the proceeds of selling a house that are invested outside tax shelters (such as retirement savings plans, tax-free savings accounts and registered retirement income funds) is fully taxable.

Canadian house prices have continued to increase over the very long term. With population continuing to rise strongly, that’s unlikely to change over the long term.

That means people who buy a house with the intent of raising a family will very likely be able to take advantage of the federal capital gains break on principal residences even if real estate goes off the boil for a few years.

As I’ve mentioned in the past, when my family came back to Canada at the end of the 1990s, we visited friends who told us their home had just climbed back to the value they had purchased it for 13 years before.

If you own a home, declining house prices are bad for your finances in any case. But the capital gains tax break makes it even worse.

For some potential homebuyers, the effect of a medium-term slide in property prices and its impact on the capital gains advantage could alter the calculus for thinking of a home as an investment.
In such a case, potential short-term buyers might be wiser to rent. Flippers will have to recalculate their profit margins. Up-sizing may lose its advantage. Retired people might be better off selling and investing the cash, because income taxed is better than no income at all.

And unlike other investments that can be claimed as a loss when they fall in value, a house cannot. In other words, capital gains on your principal residence are sheltered from tax. But so is a capital loss.

It’s hard to be sure to exactly what degree capital gains tax breaks affect people’s decision to use their principal residence as an investment. But it would seem that during a period of declining prices, that tax break would have the effect of further reducing demand for houses.

Source: Don Pittis, CBC News
http://www.cbc.ca/news/business/crea-house-prices-capital-gains-1.3801499

Sales fell 26 per cent last month in Greater Vancouver’s real estate market while prices hit new highs or stayed near records in the wake of a new tax on foreign buyers in the region.

There were 2,489 detached houses, condos and town homes in the region that sold in August, compared with 3,362 properties in the same month of 2015, the Real Estate Board of Greater Vancouver said Friday.

Industry observers had predicted a slowdown in transactions after the introduction of a new 15-per-cent tax on foreign buyers that took effect on Aug. 2 for purchases registered with the province’s land title office. The B.C. government announced the change on July 25 to the province’s property transfer tax, affecting foreign buyers who acquire homes in the political entity known as Metro Vancouver.

In Greater Vancouver, which covers a large portion of Metro Vancouver, the benchmark price of detached houses, condos and town homes reached a record $933,100, up 31.4 per cent from a year earlier and an increase of 0.3 per cent from July.

The benchmark price is a representation of the typical property sold in an area, excluding the most expensive transactions on the Multiple Listing Service.

Home sales in the region were already beginning to slow this summer after a record-breaking spring.

Sales of detached houses, condos and town homes in Greater Vancouver fell 18.9 per cent in July from a year earlier. The drop was concentrated among sales of detached properties, which declined 30.9 per cent from July last year, following an 18.6 per cent annualized drop in June.

March, April and May are traditionally the busiest months for sales of existing properties, with activity slowing from June until mid-September.

The number of new listings has been on the rise since February, although the market has remained tight because of strong sales activity.

While the focus has been on an influx of buyers from China into several neighbourhoods on Vancouver’s west side, some industry observers say there are other contributing factors such as low interest rates, population growth and limited housing supply.

Source: Brent Jang and Tamsin McMahon, Globe and Mail
http://www.theglobeandmail.com/real-estate/the-market/vancouver-sales-dropped-26-in-wake-of-foreign-buyers-tax/article31688214/

Housing price appreciation across the country will be more than it has been in the last 16 years, according to a new forecast from one of the country’s largest real estate companies.

Royal LePage, in a report out Wednesday, says economic uncertainty around the globe and low interest rates continue to fuel the Canadian existing-home market, adding that prices will rise by 12.4 per cent in 2016 from 2015 to an average of $563,000.

The real estate company predicts greater Vancouver will lead the way with prices rising 27 per cent this year to an average of $1.206 million, while greater Toronto prices will rise 14.9 per cent to and average of $718,000 during the period.

LePage says its previous forecasts didn’t account for an extended period of low mortgage rates which continue to fuel the housing market. Ratesupermarket.ca says the best fixed rate on a five-year mortgage is now 2.18 per cent, close to a record low.

“Our forecasting models, which pointed to a slowing housing market as the year progressed, included a modest increase in the cost of borrowing,” said Phil Soper, chief executive of LePage. “Economic and social disruptions have rocked the world once again, introducing new risks and making it very likely that the Bank of Canada will leave interest rates as-is for now. Few industries are as rate sensitive as real estate. We don’t see even a mild correction for either the Toronto or pistol-hot Vancouver markets in 2016.”

Despite citing the Brexit vote as increasing uncertainty in the market, LePage says foreign money tied to Europe will flow into Canadian commercial real estate as opposed to the residential market.

LePage’s own internal surveys do say foreign markets are impacting Toronto and Vancouver real estate, but the money is coming from beyond the European Union.

Its surveys of agents in the second quarter found 71 per cent in the GTA and 74 per cent in Greater Vancouver reported an increase in activity from foreign investors who were defined as having lived outside Canada for the last six months. LePage said 35 per cent of agents in the GTA and 37 per cent in Greater Vancouver believe foreign ownership accounts for less than 10 per cent of sales.

Government continues to consider measures to deal with the impact of foreign owners and the federal finance minister has promised to create a working group of provincial and municipal counterparts to consider the issue in Toronto and Vancouver. On Monday, British Columbia agreed to grant Vancouver the right to tax owners of vacant property — a move seen as being at least partially aimed at foreign investors.

Soper cautioned against government getting too involved in the housing market.

“We remain convinced that heavy-handed use of tax policy in an effort to artificially influence asset values in an open-market economy like ours is fraught with peril, particularly in a cyclical industry like housing.”

Still, he left no doubt his industry has some concerns about the fast-paced nature of the market and some of the impact it has on prices. Soper even issued a warning to speculators.

“At Royal LePage, we see residential real estate as a long-term investment supporting family life. A home is ill-suited as a buy-and-flip investment. People that engage in this kind of activity are inevitably burned when a market slows and the time it takes to sell the property increases substantially,” he said.

Source: Garry Marr, Financial Post
http://business.financialpost.com/personal-finance/mortgages-real-estate/canadian-real-estate-prices-to-see-largest-annual-increase-this-century-forecast-says

More than 90 per cent of all detached homes in Vancouver are now worth more than $1 million, up from just 19 per cent a decade ago, a new study by a local urban planner has found, showing how rapidly housing prices have escalated in the Canadian city.

The biggest jump came in the last two years, with the proportion of million-dollar homes in the city climbing to 91 per cent in 2016 from just 59 per cent in 2014, according to the study by Andy Yan, acting director of Simon Fraser University’s City Program.

“This shows how what used to be the earnest product of a lifetime of local work is perhaps quickly becoming a leveraged and luxurious global commodity,” said Yan.

The median household income in Vancouver, meanwhile, rose just 8.6 per cent between 2009 to 2013, according to the most recent data from Statistics Canada. Adjusted for inflation, it would be about $77,000 a year in 2016.

That puts typical incomes well below the threshold needed to purchase million-dollar homes, said Yan, noting other factors must be driving the sharp increase in home values in Vancouver.

“It’s global cash, meeting cheap money, meeting limited supply,” he said, adding that all three factors are working to “magnify each other” and drive further speculation.

Foreign investment has long been blamed for soaring housing prices in Vancouver, with the most recent wave of offshore cash coming mostly from mainland China.

A widespread corruption crackdown launched by Chinese president Xi Jinping in late 2012 has led to massive currency outflows, which have coincided with a sharp jump in housing prices in Vancouver’s prime neighborhoods.

The new data comes as Canadian Prime Minister Justin Trudeau is in Vancouver for a two-day visit. Trudeau on Thursday said that his government needs to take measures to ensure residents of cities like Vancouver and Toronto can afford housing.

Yan’s study looked at provincial assessment data, which lags sales data by several months, and was focused exclusively on the roughly 67,000 detached homes in the City of Vancouver. All values were adjusted for inflation.

Region-wide, the price of a detached home soared 130 per cent over the last 10 years to hit $1.5 million in May, according to the local real estate board. Adding in apartments and townhomes, the typical home in Greater Vancouver now costs $889,100.

Source: Julie Gordon, Reuters
http://business.financialpost.com/personal-finance/mortgages-real-estate/nine-out-of-10-vancouver-houses-now-worth-more-than-1-million-study-finds

Real estate prices in key global cities are rising at a slow, moderate pace, particularly in Europe.

According to new research published by international real estate consultant Knight Frank, 35 of the world’s most important cities saw an average price increase of 3.6% in the year to March 2016.

“Since 2014 the index has consistently seen annual growth of 3-4%, with no city recording double-digit annual price declines since the second quarter of 2015,” notes Kate Everett-Allen of Knight Frank, who carried out the study.

However, Everett-Allen found some notable differences both between regions and within them. In North America, for example, New York, Miami and Los Angeles grew by 2.3%, 3.8% and 5.1% respectively but Vancouver saw a spectacular 26% rise in real estate prices — despite a 1% increase in land transfer tax on purchases above CAD2M.

Australasia was more homogeneous, with both Sydney and Melbourne posting a 12% rise. The two African hubs were also in positive territory, albeit with some difference between the two—Cape Town went up 6.9% and Nairobi up 3.3%. Asia was rather more of a mixed bill, with excellent growth in Shanghai (to the tune of 20%) but sizeable drops in Hong Kong and Taipei (down 6.4% and 7.6% respectively.

In Europe, real estate growth was modest and fairly consistent across the majority of cities, with prices either remaining flat or recording small rises of less than 3%. Only Moscow, Paris, Milan and Monaco bucked the trend. The first three saw dips (of 5.9%, 2.7% and 1.2% respectively) while Monaco recorded a 4.9% rise.

However, says Everett-Allen, some of these numbers need to be analysed in the context of past performance. Prices in London, for example, only grew by 0.8% in the year to March, the lowest figure since October 2009
 — but the British capital had experienced a period of exceptional growth in earlier years so a slowdown was natural.

Interestingly, the Knight Frank study also showed that, across the world, the impact of new transparency rules, new taxes or fees for foreign buyers—all of which are seeing a surge in global hubs—varies hugely depending on the pre-existing fundamentals and market cycles.

Thus, the land transfer tax rise had no depressive effect in Vancouver, nor did new transparency rules for cash buyers affect the New York and Miami markets. In London, by contrast, a series of changes to stamp duty land tax and to purchases by non-domiciled residents, have amplified the market cycle and helped slow down price growth.

Source: Carla Passino, Forbes http://www.forbes.com/sites/carlapassino/2016/05/19/slow-and-steady-real-estate-growth-in-world-cities-is-an-exercise-in-moderation/#108e2b7349c6

With Vancouver’s housing market racing off the charts, I found this interesting article by mortgage broker Atrina Kouroshnia who explains the risks involved in presenting an offer without subjects.

In competitive housing markets like Vancouver, buyers feel the pressure to move quickly and make seller-friendly offers, often with no subjects such as financing or inspections. In fact, the Vancouver Sun reported a few months ago that some houses and condos in the area sold within a week or two (one house sold with no subjects and for $50,000 above asking price). With low housing inventory and high demand, realtors don’t expect that competitive landscape to change any time soon.

While an offer with no subjects could certainly be more attractive to the seller, I do not advise my mortgage clients to go in without subjects due to the potential risks involved.

The only time I would say to go in without any subjects would be if you’re looking at making a cash offer and you’re paying for the value of the land so you don’t care about the inspections and don’t need time to line up financing. Here, I would also emphasize the importance of having your own representation. Some buyers think that not having their own agent puts them in a more advantageous situation, but the truth is that the sellers’ agent is contracted to represent their sellers and in some situations they can even be encouraging a bidding war and discouraging subjects.

For those who need a mortgage, having at least one subject would allow the buyers to exit the deal if they need to. For instance, if your offer was subject to a home inspection, that could buy you time to get the mortgage financing in place. The vast majority of my clients review strata documents, conduct a home inspection and secure financing before removing subjects.

When you make an offer, you usually have a grace period where you can work through removing the subjects such as reading the strata minutes, booking a home inspection and arranging for your financing. By the end of the grace period, you have to either remove subjects and move forward with the deal or you don’t remove subjects and basically the accepted offer becomes void.

Remember, a pre-approval doesn’t mean you’re 100 per cent approved for whatever home you decide to buy. For instance, if you suspect there’ll be multiple bids on a property and you make a bid that’s higher than the asking price, the home’s appraised value may fall short of your offer.

Another scenario where you might run into financing problems would be if the life expectancy of the house does not support the amortization of the loan. If the value of the property is in the land, most lenders will not finance a tear-down. Instead, they might finance a lower amount (say, 50 per cent of the land) on the property.

With competitive situations, it’s easy to get caught up in bidding wars and succumb to pressure to make offers without subjects, but I think the key is to treat it like a business transaction and maintain a clear head. Have a maximum budget you’re willing to spend and do not go above that amount.

If you try to be more competitive by offering a higher price or not placing any subjects, you could be playing with fire and wind up getting burned. Only you can determine how much risk you’re willing to take on.

Fierce competition among banks and home buyers is driving mortgage rates down and home prices up, signalling the start of a spring housing market that many observers expect will be particularly heated this year.

Bank of Montreal unveiled a 2.79-per-cent promotion for its five-year, fixed-rate mortgage Tuesday, a special that comes with prepayment restrictions. Toronto-Dominion Bank quickly rushed to match the offering, saying it will drop the posted rate on its standard five-year mortgage to 2.79 per cent, from 3.09, starting Wednesday. Canadian Imperial Bank of Commerce began offering a five-year fixed mortgage earlier this month with a rate that starts at 1.99 per cent for the first 9 months before rising to an average of 2.79 per cent. It resets to [2.92] after 9 months.

BMO’s move was largely expected: It is the fourth year the bank has come out with a low teaser rate in the spring since it raised the ire of former Finance Minister Jim Flaherty with a 2.99 per cent special in 2012.

A spokesperson for Finance Minister Joe Oliver declined comment on the mortgage rate cuts.

Meanwhile, Canada’s top financial regulator said he isn’t concerned about the potential impact of lower mortgage rates on the financial system.

“We constantly reinforce that it is the banks themselves that determine the risks they want to assume, risks they must subsequently measure, monitor and manage,” Jeremy Rudin, head of Office of the Superintendent of Financial Institutions (OSFI), said in a prepared speech to the International Finance Club of Montreal.

Several mortgage brokers, however, called the posted rate specials a gimmick. Most major banks have already been publicly offering rates to brokers as low as 2.74 per cent for standard five-year mortgages for the past several weeks.

“Every mortgage broker in Canada is offering at those rates,” said Toronto-based mortgage broker Ron Butler. Several banks are offering rates as low as 2.69 per cent on larger mortgages, with some brokers offering to sacrifice part of their commission to push rates as low as 2.44 per cent.

The renewed rate war among the major banks underscores the intense competition coming just as the spring housing market is set to bloom.

In the Toronto area home prices were up nearly 11 per cent in the first two weeks of March compared to the same time last year, the Toronto Real Estate Board said. In Vancouver, where homes sales have also been strong this year, the average detached house now sells for nearly $1.4 million.

Ratehub, an online mortgage rate comparison tool, has seen record traffic to its website since the Bank of Canada slashed interest rates in January, said chief marketing officer Kerri-Lynn McAlister.

“In Southwestern Ontario and the Lower Mainland of British Columbia, it’s going to be one of the hottest years on record,” thanks to record low rates, Mr. Butler said.

Yet, despite strong home sales in some regions, banks have struggled to grow their new mortgage loans with housing markets cooling outside of Ontario and B.C. amid sliding oil prices.

The growth rate of residential loans has steadily slowed over the past two years to roughly 4 per cent, from 9 per cent in 2013, according to data from OSFI. BMO in particular has seen its total personal and commercial loan growth rate slow from 10.1 per cent in the first quarter of last year to 3.7 per cent this year.

That means rates could fall further. With government bond yields falling to record lows, the spread between where banks borrow and where they lend is now 1.95 percentage points compared with 1.3 per cent a year ago, when mortgages rates were higher, leaving room for more rate cuts.

Banks have also been engaged in a tug-of-war between fixed and variable rate mortgages, often getting more aggressive on fixed mortgage rates when too many borrowers flock to variable mortgages because of falling interest rates. “It skews the balance sheet for the lenders and they have no choice,” but to offer more attractive fixed rates, said Jason Henneberry, a partner at B.C.-based MortgagePal. “They need to try to fill the pipeline with more fixed-rate mortgages so they can hit the targets that they’re mandated to hit.”

Falling rates have been a gift for Ben Rodgers and his wife, first-time buyers who have spent the past two years shopping for a house in Toronto’s heated market. Earlier this month, they were the winning bidder on a $725,000 two-bedroom semi-detached home in their current neighbourhood and are now shopping around for the best mortgage rate.

“Banks were bending over backward to preapprove us for even more than we could afford. But we knew the maximum mortgage we could carry and we’re not going to be wooed by lower rates.”

Mr. Rodgers said the couple, who are in their 40s with two young children, said they long planned to use the low rates as an opportunity to pay down their mortgage faster, rather than splurge on a bigger home. “We’re going to live a pretty spartan existence for the next little while no matter how low the rates go,” he said. “We’re planning for the long-term.”

Source: Tamsin McMahon, The Globe and Mail with files from David Berman

In cities such as Vancouver and Toronto, the average cost of a detached home will set you back more than seven figures. Meanwhile, the market in Alberta has seen sales and prices drop since the collapse of oil.

In January, Deutsche Bank AG warned that homes in Canada are overvalued by 63 per cent, and that homeowners are “in serious trouble” due to rising debt levels. But the Bank of Canada’s surprise decision to cut interest rates that same month, has given some Canadians incentive to keep buying property.

Toronto

In Toronto, skyrocketing real estate prices hit a new high on Wednesday with the average price of a detached house in the city surpassing $1 million.

The average cost of a detached home hit the seven-figure mark for the first time last month, according to numbers from the Toronto Real Estate Board. That price was up 8.9 per cent over last year and helped drive the overall average selling price of a Toronto home up to $596,163.

The Toronto real estate scene was a seller’s market in February, with more people buying homes and fewer people putting them up on the market. The number of homes sold went up by 11.3 per cent, despite there being 8.7 per cent fewer on the market when compared to February 2014.

“The detached (house) market has been especially tight, we are not seeing a lot of new supply come online, and certainly not a lot of listings,” said Jason Mercer, the director of market analysis at the TREB.

The average cost of a detached home in the city came in at $1,040,018 last month, while semi-detached homes went for an average of $702,305, up 4.9 per cent over last year.

The strong gains for Toronto’s detached and semi-detached markets were offset by a fall in sale prices for townhouses and condo apartments in the city. The average selling price of a townhouse fell by seven per cent, while condos sale prices dipped by 0.9 per cent.

Rising prices have pushed some prospective home buyers to eye property in the city’s suburbs, but they too have been affected by the housing boom.

Residential sale prices were up across the board in the Greater Toronto Area’s 905 area code regions. The average price of a semi-detached home surged by 11.6 per cent in the GTA, while fully detached went up 8.5 per cent, condos spiked 10.9 per cent and townhouses were up by eight per cent.

In the nearby Durham Region, the average price for a detached home is more than $467,000.

David Batori is a real estate agent who has been selling homes in the north end of the city for 25 years.

He says he has seen prices in area change drastically.

“When I started you couldn’t give a house away from $250,000 in some of these north Toronto neighbourhoods … so yes, I’m completely surprised,” he told CTV Toronto.

“Building lots are selling for north of a million dollars,” he added.

Vancouver

On the west coast, the housing market has seen record-breaking sales. The average price of a detached home in Vancouver reached almost $1.4 million last month. And last month, the city saw 3,000 properties change hands — a 60 per cent jump from January.

“There is a shortage of inventory, and also money is cheap right now – interest rates are fantastic,” said Charlie Real, a local real estate agent.

That can mean waiting as long as six months to get a winning bid on a home, as was the case for Vancouver native Neil McIver.

“We made bids on three different places, every one of them went above what the asking price was,” he said.

“I think it is a little bit irresponsible and a little bit crazy but that is the marketplace in Vancouver (that) you are dealing with,” he added.

Alberta

Meanwhile, sliding oil prices are responsible for a slowdown of the housing market in Western Canada.

Home sales have dropped by a third in Calgary, and the average price of a detached home has fallen four per cent to $462,000.

But some real estate analysts aren’t concerned by the recent dip in the province.

“The market has cooled down, (and) we are seeing fewer sales and listings come up,” said Felicia Mutheardy, a senior market analyst at the Canada Housing and Mortgage Corporation.

“The market is taking a step back and returning now to a more balanced terriroty,” she added.

Source: Josh Elliott and Michael Shulman, CTVNews.ca