However, Toronto condo sales are an exception. They show a very new high.
RBC suggests that homeownership costs are easing a bit, though they are at a rather “crisis level” in the regions of Vancouver and Toronto.
The summary of the reports is as follows:
RBC: Softer Housing Market Providing Affordability Relief
Home prices have fallen. As a result there appeared lower homeownership costs across the country.
The index of the average share of income that needed to cover all costs of homeownership have fallen to 51.9%, which is down 0.7% from the previous three months. The percentage is higher in such places as Vancouver (84.7%) and Toronto (66.1%). It is lower in Montreal (44.5%), Ottawa (40.6%) and Calgary (40.3%).
Flat home price grows over the year. Some declines can appear in Alberta and Vancouver. So the authors expect a bit more relief to come for homeowners.
“With household income still set to rise, the outlook for affordability has brightened somewhat,” the report said.
Will Dunning, the chief economist for Mortgage Professionals in Canada, suggests that calculation methods of RBC “overestimate” the costs of homeownership. The reason for this is usage of posted rates. “Since the amount of discounting has increased, the charts showing changes over time are distorted versus reality,” he wrote.
Nevertheless, RBC notes that there was little relief in Toronto and Vancouver. “Affordability is still at crisis levels in these markets and pressure is intensifying in Montreal.”
Vancouver Home And Condo Sales Plummet
The Real Estate Board of Greater Vancouver reports that Vancouver condo prices posted their largest year-over-year decline since 2009. The benchmark condo price fell to $660,300 in February, which is down 4% from the past 12 months and down 5.1% over the past 6 months.
There were 759 condo sales in the month, down 36% compared to a year ago, while all detached home sales were down 32.8%.
Toronto Condo Prices Reach All-Time High
The Toronto Real Estate Board reports that Toronto condo prices showed a new high in February due to the fewer condo buyers in the market.
The average condo price was $562,000, which is up 6.1% from last year. At the same time sales continue to fall, showing a 6.7% decline from last year.
At the detached home segment the prices were down 2.1% year-over-year to $981,000 and sales were down 9.6%.
“With sales substantially lower than the 2016 record peak over the last two years, we have experienced a hit to the economy in the billions of dollars in the GTA alone,” said Jason Mercer, TREB’s Director of Market Analysis and Service Channels. “This hit has also translated into lower government revenues and, if sustained, could impact the employment picture as well.”
Vancouver Not Alone in Falling Luxury Home Prices
There is dramatic fall in luxury home prices in Vancouver. However, other cities are also experiencing this trend.
The Economist magazine noted that prices of “prime” properties in Vancouver were down 12% over the past year. Royal LePage’s Luxury Properties forecast a further 7% decline for properties valued at $5 million and more over the next year.
The prices for prime properties in Sydney were down 16% since the year 2017, while prices in Hong Kong have fallen 9% since August. It was reported that these markets experience very similar price movements as they are all impacted by similar international trends in mobility and wealth creation.
B.C.’s Non-Resident-Owned Properties Worth More
Statistics Canada’ data shows that non-resident-owned properties in British Columbia are worth more than resident-owned properties.
According to the figures, Vancouver’s value of a non-resident-owned single-detached home was worth $236,000 more (36.7%) compared to the owned by Canadian residents. Non-resident-owned condos were worth $96,000 more in Vancouver, and $37,000 in Toronto.
According to the report, the gap was less definite in Ontario for single-detached homes.
Non-resident ownership rates were highest in Whistler (15.9%) in B.C. and Metro Vancouver (16.9%), Kenora (13.3%) and Algoma (14.1%) in Ontario.