House prices increased by an astounding 17 per cent in January, CREA said. (Patrick T. Fallon/Bloomberg)
Home sales were higher during the month, but prices truly soared, the Canadian Real Estate Association reported Tuesday.
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As has been the case for several years, however, two large and hot markets, in Toronto and Vancouver, skewed the national average higher.
Strip the two cities out of the numbers and the average Canadian home was worth $338,392 last month while the year-over-year gain drops to eight per cent.
If B.C. and Ontario were stripped out, the picture would look even bleaker — the average price of a Canadian home would have dropped by 0.3 per cent in January to $286,911.
“While we continue to believe that things just can’t any hotter, markets in B.C. and Ontario continue to prove us wrong,” TD economist Diana Petramala said, adding that for Toronto and Vancouver, “every month of double-digit home price growth raises the risk of a deeper home price correction down the road.”
Despite the eye-popping price gains on a national level, there are signs of tightening in the market locally.
On an annualized basis, prices declined in January in four provinces, including Alberta, Saskatchewan, Nova Scotia and Newfoundland and Labrador.
The average price gain across Canada’s 26 largest cities was 4.7 per cent in January; the strongest was 31 per cent in Vancouver; the weakest was –10 per cent, in Newfoundland and Labrador, which is considered one single market and thus compared to other cities.
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