Vancouver housing market stalls for first time since 2013

The Canadian Real Estate Association says home sales last month hit a record high nationwide, even as Vancouver-area home prices fell from last quarter.

Home sales over CREA’s Multiple Listings Service system increased by 1.1% in March to top the previous monthly record set in April 2016.

Sales were up on a month-over-month basis in more than half of the local markets measured, led by Greater Vancouver and the nearby Fraser Valley region in B.C., as well as London, Ont., St. Thomas, Ont. and Montreal.

Compared with a year ago, sales were up 6.6%, as gains in the Greater Toronto Area led the way.

The actual national average price for homes sold in March this year was $548,517, up 8.2% from a year ago.

Excluding Greater Vancouver and Greater Toronto, the average price was $389,726.

Read: Overvalued housing will deepen Canada’s next recession: CIBC

Markets in Vancouver and Toronto diverge

Though Vancouver home prices are up compared to the first quarter last year, the pace of year-over-year home price appreciation in Greater Vancouver was noticeably lower — with a 10% year-over-year change — than the historic highs witnessed in 2016. In fact, for the first time since 2013, home values for the region as a whole declined on a quarterly basis.

“The Vancouver market stalled, as confused consumers took to the sidelines after a series of unco-ordinated moves by all three levels of government,” says Phil Soper, president and CEO of Royal LePage, in a release. “With the housing shortage becoming more acute, Toronto easily stepped forward to assume the title of Canada’s most overheated real estate market.”

In the Lower Mainland, sales activity is down 40% compared to recent norms, says Soper. Further, as much as 90% of lost housing sales in that region, following the introduction of the foreign buyer tax, is a result of Canadian residents — not foreign investors — putting off buying, he says.

Meanwhile, price appreciation in the Greater Toronto Area reached new heights in the first quarter, rising by an unprecedented 20% year-over-year across all housing types studied.

Read: Speculators drive housing demand in GTA, but who will help?

And home price appreciation is extending further into other southwestern Ontario markets like London and Windsor, due to strong demand, supportive economic factors and the quest for affordability.

The steep price gains have some analysts forecasting major downward price adjustments, while others call for public policy measures.

The federal finance minister is set to meet today with his Ontario counterpart and the mayor of Toronto to discuss the hot housing market in the Greater Toronto Area. The gathering in Toronto comes as the Ontario government readies to unveil a much-anticipated package of housing affordability measures.

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