British Columbia Boosts Canada Property

The property boom in British Columbia boosted the Canada property market in 2017, despite growth slowing in the Greater Toronto area.

The MLS Home Price Index released by the Canadian Real Estate Association revealed that the national benchmark property price reached $600,300 in December, up 9.1 per cent from a year earlier.

Greater Vancouver property prices climbed 16 per cent in December compared with a year earlier, reaching an MLS benchmark price of $1,050,300 at the end of 2017 as British Columbia real estate markets shrugged off the impact of the foreign-buyers tax imposed on overseas property investors in August 2016. Prices in the Fraser Valley rose 21 per cent and Vancouver Island prices climbed 19 per cent in December compared with a year earlier.

In contrast, a slowdown was seen in Ontario after the Ontario government introduced a package of reforms in April, including their own foreign-buyers tax.

The Greater Toronto Area saw prices rise 7 per cent in December compared with a year earlier, according to the MLS Home Price Index, while prices in Oakville-Milton fell 0.8 per cent in December compared with a year earlier.

However, although volume of home sales fell 7.6 per cent in December in the GTA compared with a year earlier, the result was still a sharp improvement from midyear when sales were down as much as 40 per cent on a year-on-year basis.

Growing demand in the Greater Toronto area has been countered by a boom in new listings, up 51 per cent year-on-year, keeping price increases in check.

National sales of Canada property were down by 4 per cent overall, based on the total volume of sales throughout the year, though a sharp correction in property prices is not expected.

The MLS Home Price Index adjusts for the mix of home types sold during the year to provide a benchmark sales price. The average sale price in Canada, by comparison, rose 5.7 per cent in December to $496,532, which was significantly lower than the benchmark price. The average was pulled lower by the larger proportion of condominium sales compared with single-family homes, especially in the GTA.

Property sale prices fell in four of the fourteen major markets in Canada, while other major markets such as Greater Montreal and Ottawa saw increases of 5.4 per cent and 6.6 per cent respectively.

Overseas property investors interested in Canada property should choose their area carefully, though the 15 per cent foreign-buyers taxes introduced do not seem to be deterring many from investing in Canada.