Even as a second wave loomed in the third quarter, home prices in Canada rose on average by 8.6 per cent compared to last year. It seems 2020 may also end on a higher note than 2019, according to statistics from the Royal LePage House Price Survey and Market Survey Forecast released today.
Right now, an average home costs $692,964, with rates rising mostly in Ontario and Quebec. Royal LePage CEO Phil Soper says the pandemic has motivated Canadians to put more of their money towards saving for a home, driving up housing prices and sales. High demand and low inventory continue to fuel a seller’s market.
Home prices by type
The average price of a condominium also increased year-over-year to $510,365.
“The price of condominiums, the sector hardest hit by the pandemic, has risen 5.3 per cent nationally compared to last year, said Soper. “When a landlord needs to sell a unit after young tenants move back to their parent’s home, and with fewer new immigrants or opportunities for short-term rental income, there are plenty of first-time buyers ready to seize the opportunity to get into the market.”
A two-storey home rose 10 per cent year-over-year to $819,906, while the median price of a bungalow increased seven per cent to $570,701. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.
“Typical consumption patterns have been disrupted in 2020 as the pandemic has driven the household savings rate to levels not seen in decades,” Soper added. “Most Canadians have sharply reduced spending on discretionary goods and services involving a great deal of human interaction, and with mortgage rates at record lows, many have refocused on housing investments, be it renovations to accommodate work-from-home needs, a recreational property or a new property better suited for the times.”
Statistics Canada reported that in the first quarter of 2020, the household savings rate climbed to 7.6 per cent of disposable income, the highest since 1996. In the second quarter, savings spiked to 28.2 per cent, the highest savings rate since the early 1960s. From 2015 to 2020, the average savings rate was about three per cent.
Competition remains high amongst buyers in many regions. According to a recent Royal LePage Advisor Survey, during the month of September, 95.4 per cent of Royal LePage agents surveyed said detached houses in their region were attracting multiple offers and 54.1 per cent said that condominiums were attracting multiple offers. According to the national survey, 89.4 per cent of agents had to place at least two offers on behalf of their clients to purchase a home during the third quarter. Sixteen per cent had to place more than five offers. In Quebec, the proportion of agents who had to place more than five offers rose to 19.1 per cent, the highest in the country.
Ontario and Quebec by Region
In Q3, Windsor reported the highest spike, with the average price rising 17 per cent year-over-year followed by Oshawa (15.0 per cent), Kitchener/Water/Cambridge (13.9 per cent), Hamilton (13.7per cent), and Mississauga (13.5 per cent). In Quebec, the fastest appreciating regions were in the Greater Montreal Area, where the average price rose 12.5 per cent year-over-year in the third quarter driven by gains made in Montreal Northshore, Montreal East, and Montreal Centre.
In the Greater Toronto Area (GTA), there was an 11 per cent year-over-year increase to $922,421. Condominiums continued to see healthy price appreciation, with the average price rising 6.8 per cent year-over-year to $599,826. A standard two-storey home went up 12.2 per cent to $1,082,502.
The City of Toronto saw similar increases. The average price of a condo grew 4.9 per cent to $644,903, where the median price of a two-storey home increased 15.5 per cent year-over-year to $1,483,510,
“The seasonal slowdown is expected in the coming months, but given the recent strength of September, we will likely see a more brisk fourth quarter market than the previous year,” said Debra Harris, vice-president, Royal LePage Real Estate Services Limited. She added that while active listings are up, the sales to listings ratio and decrease in days on market indicate that properties are being quickly absorbed by demand.
“The detached home market is outperforming the condo market but condo demand is still considered healthy,” she noted. “Condo sales were up 15 per cent in September compared to September 2019. In Toronto, we are used to strong seller markets and a balanced market can seem quiet by comparison.”
Here is the Royal LePage House Price Survey Chart, featuring Canada’s largest 64 housing markets.