The rising prices of real estate in Toronto and Vancouver has been well reported, with many factors, including a slumping Canadian dollar, foreign investment and low interest rates all attributing to the gains. Now, real estate company Royal LePage has said that the exodus from Alberta could well boost prices in those cities even higher.
The economy in Alberta is slumping, and with people moving away from the area and towards thriving metropolitan areas, it is likely that property prices will gain. As part of the first quarter house price survey for the year, Royal LePage showed that the average value of a home has jumped by 7.9 per cent year-on-year; an increase of $512,621. When broken down into property types, condos have gained by 4 per cent, rising to an average cost of $344,491.
Meanwhile, two-storey homes jumped 9.2 per cent to $629,177, and bungalows climbed to $426,216; a rise of 6.8 per cent. However, despite the positive figures indicating an extremely healthy real estate sector, Royal LePage President Phil Soper said there are some ‘extreme regional disparities of the kind we haven’t seen in over a decade.’
For example, in the city of Vancouver, there’s been significant growth. The average price of a home has soared by 21.6 per cent, with people having to pay around $1,044,750. In Toronto, meanwhile, the average property now costs $613,733; a rise of 8.4 per cent. However, other areas, such as Regina, have seen slumps. Here, the city’s overall property value has dropped during the year by 1.1 per cent to reach $327,618. Calgary, meanwhile, has fallen by 0.6 per cent to $466,184.
Soper expects regional prices in Toronto and Vancouver to climb even higher as many residents of Alberta seek work in Ontario and B.C. “For the first time in many years, we are witnessing an out-migration trend in (Alberta), as economic conditions and employment prospects dim,” Soper said, adding: ‘We expect British Columbia, followed by Ontario, to be the top recipients of new household inflows in the coming year, which will further fuel housing demand and price appreciation in Greater Vancouver and the GTA.’
Investors might be glad to hear that Ontario and B.C. are not the only places expected to see rising property prices in coming months. During the first three months of the year, the Greater Montreal Area saw a 9.4 per cent year-on-year rise in value. The number of homes selling for over $1m on the island of Montreal rose by 14 per cent, whilst there was a 23 per cent leap in the number of transactions for properties priced between $500,000 and $1m.
There are a number of factors contributing to Montreal’s booming market, including an expanding economy, lower energy costs and the falling Canadian dollar. However, infrastructure projects such as the Turcot Interchange and Champlain Bridge renovations are also expected to help. ‘Following a multi-year-period of stalled economic and residential real estate market growth, the Greater Montreal Area is seeing a frankly wonderful upswing in demand and unit sales, which often foreshadows stronger home price appreciation,’ Soper explained.
Overall, many Canadian markets are still gaining and, for those who invest in the right places, good returns are there to be made.