Canada ranks fourth out of 55 countries after Iceland, Hong Kong, and New Zealand in Knight Frank’s Global House Price index. The London based global real estate consultancy’s quarterly index allows investors and developers to monitor and compare the prices of mainstream housing markets in the world. The consultancy used the official data from Central Banks or National Statistics Offices in each country to compile its index.
The average housing price in Canada in Q1 2016 to Q1 2017 grew by 13,5%. Iceland headed the list with 17,8%, followed by Hong Kong (14,4%) and New Zealand (13,8%).
Generally, housing prices recorded growth across the world. The average house price rose by 6,5% on average across 55 countries. This is the highest rate of annual growth recorded by the index since 2014. The prices in eleven countries went up by double-digits in the year to March 2017, including in Iceland, Hong Kong, New Zealand, Canada, Turkey, Malta, Check Republic, Estonia, Hungary, China, Norway.
The report speculates that the economic growth and property reputation as a safe heaven investment are primary reasons for the average prices shifting up a gear. Another reason is greater availability of mortgage finance in developing markets.
Canada housing prices up but sales were down
The Canadian housing price, in fact, went up as several other sources suggest. But it was a different story with sales. After Toronto introduced foreign buyer’s tax, Toronto-area home sales dropped.
The actual sales activity was down by 7.5 percent in April from 2016. The drop in sales was most prominent in B.C.’s Lower Mainland, notably Vancouver. The decline was also recorded in the Greater Toronto Area (GTA).
Another measure was introduced to cool down the hot housing market, namely, Fair Housing Plan, which included a non-resident tax. This affected detached homes, in particular, where the sales fell 26% year-over-year. Semi-detached homes recorded a fall of 22 %.
Home sales activity improves in June
Despite of the reported decline of housing sales up until May 2017, the statistics released by Canadian Real Estate Association’s (CREA) shows that national home sales went up from May to June 2018.
“More than 60% of all local housing markets reported increased sales activity in June compared to May, led by the Greater Toronto Area (GTA). By contrast, sales in British Columbia continue to moderate” the report says.
“This year’s new stress-test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift,” said CREA President Barb Sukkau. “The extent to which the stress-test continues to sideline home buyers varies by housing market and price range. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to in the future,” said Sukkau.