According to the Royal LePage House Price Survey* and Market Forecast Survey, home price appreciation slowed nationally in the second quarter of 2018, marked primarily by year-over-year price declines in the Greater Toronto Area (GTA).
The Royal LePage National House Price Composite1, showed that the price of a home in Canada increased 2.0 per cent year-over-year to $613,968 in the second quarter of 2018. When broken out by housing type, the median price of a two-storey home rose 0.8 per cent year-over-year to $720,504, while bungalows climbed 1.8 per cent to $512,979. Condominiums posted a significant price gain, rising 8.1 per cent year-over-year to $435,421. Looking ahead, Royal LePage forecasts an uptick of 1.9 per cent in home price appreciation over the next three months.
“We expect an uptick in sales volumes and prices during the second half of 2018,”said Phil Soper, president and CEO, Royal LePage. “The fundamentals have not changed; the economy is strong and unemployment is very low. We face inventory shortages in our major cities, with many more people looking for homes than the market has available. Upward pressure on prices will likely return to most markets during the third quarter.”
In the second quarter of 2018, Ontario saw the most significant contrasts yet between home price appreciation rates in the surrounding Golden Horseshoe cities and beyond compared to central and suburban Toronto. Factors include a combination of buyers seeking affordable detached homes further out and retirees selling to release equity in their GTA property.
In Quebec, the Greater Montreal Area witnessed strong home price increases, supported by solid economic performance. In the second quarter, the aggregate price of a home in the Greater Montreal Area rose 5.9 per cent year-over-year — well over the 2.0 per cent aggregate price increase observed nationally. The last time that the region’s rate of home price appreciation surpassed the national aggregate was in the second quarter of 20112, when the year-over-year increase in prices in the Greater Montreal Area reached 6.4 per cent, versus 4.7 per cent nationally.
British Columbia continues to see the highest home prices and appreciation rates in the country, including solid double-digit home price increases in several Greater Vancouver suburbs. Looking ahead, Royal LePage experts in the Lower Mainland, however, have observed slowing market conditions — a result of new lending regulations and the B.C. government’s introduction of new tax measures targeting the housing market, combined with strained affordability.
* Powered by Brookfield RPS.
1 Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions. Beginning in the first quarter of 2018, seven real estate markets were added to the Royal LePage National House Price Composite. The new regions are smaller markets in Ontario, Alberta, Quebec and British Columbia. Due to the relative size of the markets, any change to the Royal LePage National House Price Composite is expected to be within 0.15 per cent.
2 According to historical data from RPS Real Property Solutions.