As COVID-19 has shaken the world, many people are reevaluating where they want to live. The pandemic has caused supply-chain disruptions, higher inflation, and labour shortages.
As the economy is changing, this could be an opportunity to move to Canada, but is it worth the move? In this article, we discuss the current house market situation in some of the biggest cities in Canada: Calgary, Vancouver, and Toronto. We discuss the current economic situation to give you the whole landscape.
If you’re interested in starting a new life in the land of poutine, maple syrup, and beautiful scenery, let’s take a look at Canada’s current situation.
The current economic situation in Canada
Before moving to another country, it’s important to figure out a budget. There’s no hiding the fact inflation in Canada has seen an all-time high in 18 years, up 4.4% since February 2003.
Surging consumer demand, global supply chain issues, product shortages, and rising oil prices have skyrocketed the cost of living. The rising costs have caused housing prices to increase by 4.8%. However, the Bank of Canada has reduced interest rates by 0.25% to support businesses and consumers.
The cost of living includes necessities like shelter, transportation, groceries, and child care. The current cost of living for Vancouver, Calgary, and Toronto are $4,557, $4,240, and $5,523 respectively for a family.
The Housing Market Across Canada
Take a look down below to see some different housing market statistics related to Vancouver, Calgary, and Toronto.
Prices in the Greater Vancouver area have climbed up a staggering rate of 95.6% compared to ten years ago. The Real Estate Board of Greater Vancouver has reported the current benchmark for houses is $1,199,400.
The Real Estate Board of Greater Vancouver covers Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.
High prices with a low amount of inventory for sale have made the housing market in Vancouver extremely competitive. Home listings have been the lowest in three years. As demand continues to rise, homeowners have the power to negotiate for a higher selling price.
As homes continue to sell out, people have opted for apartments as well. The average rent can range from $1,250 to $4,000 depending on the unit.
Vancouver and Toronto are the most expensive cities overall. WOWA, an industry leader in real estate, has reported the purchase price for these two cities will continue to grow.
The Canada Mortgage and Housing Corporation (CMHC) has rolled out a First-Time Home Buyer Incentive. Homebuyers in Vancouver, Victoria, and Toronto can qualify for a 5% or 10% down payment paid by the Federal government. The incentive plan offers a household income of up to $150,000 and a total borrowed amount of up to 4.5x their household income to increase direct demand.
Calgary (and the prairie provinces in general) have had a difficult year in the housing market, but that is good news for you. Housing prices in Calgary have gone up 9%, to $460, 100 compared to October 2020. However, Calgary still struggles with demand as people compete to purchase homes–supply remains 16% lower than last year.
Detached homes represent the majority of home sales at 59%, followed by semi-detached homes at 10%, townhouses for 15%, and condo apartments at 17%.
Detached homes are currently selling around $581,104, an increase of 6% compared to 2020. Other types of dwellings have decreased compared to last year.
Calgary Real Estate Board (CREB) chief economist Ann-Marie Lurie remains positive as signs of the housing market continue to improve. “Much of the persistent strength is likely related to improving confidence in future economic prospects, as well as a sense of urgency among consumers to take advantage of the low-lending-rate environment.”
You can also check out our listings in Airdrie to see if any fit within your budget and needs. We specialize in Airdrie homes, so contact us today for more information.
Toronto is currently in a seller’s market, as demand exceeds supply. The CMHC has pointed out “A mix of moderate price acceleration and overvaluation are combining for high market vulnerability in many parts of the country, including the Greater Toronto Area (GTA) region.”
Housing prices have risen 16% higher than the ten-year average, especially as people are caught in bidding wars. Single-family homes are now going for an average price of $1,573,764, up 33.5% from September 2020 while condos average at $1,036,831. It doesn’t help that listings have dropped 34%.
As single-family homes are quickly selling, people have opted for condos, which go for an average rent of $2,070 per month. The Toronto Regional Real Estate Board (TRREB) reports the situation will persist as demand grows and inventory remains low.
While prices have gone up considerably, don’t let it deter you from moving to Canada. The CMHC has taken preemptive measures to help out potential buyers.
The CMHC has taken action in hopes of balancing the housing market again. For starters, they have decreased required credit scores from 680 to 600. The standard for insured mortgages has decreased and the GDS and TDS ratio has increased from 39% and 44% from 35% and 42%, respectively to encourage buying again.
However, the Office of the Superintendent of Financial Institutions (OSFI) and the Ministry of Finance have raised the rates for the mortgage stress test once again. Rates have gone from 4.79% to 5.25% for buyers, which proves to be an obstacle.
Interest rates are currently at 0.25% but the Bank of Canada has announced that rates will most likely increase by 0.75% by the second quarter of 2022 with variable mortgage rates to follow. By 2023, interest rates will be between 1.75% to 3%.
Resources for Finding a Home
When looking for a house, it’s always important to get proper advice from an experienced realtor. There are several resources you can access for more information.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry associations. CREA works on behalf of the public and realtors to represent its interests to the federal government. They also uphold the ethical standard for all Realtors to act by.
The Calgary Real Estate Board (CREB) is one of the largest real estate boards across Canada. CREB provides realtors with the latest technology and province-wide Multiple Listing Service (MLS) System to stay up to date with the current housing reports.
So is it worth moving to Canada?
Despite the rise of housing prices, Canada has many perks to offer. We’re the land of maple leaves, great health care benefits, gigantic moose, and we’re first place in quality of life!
Canada is a great country to live in when comparing factors such as standard of living (which we’re also #1) and cost of living to other countries. We rank higher than countries like the United States, Norway, and Australia. As the number of permanent residents increases, Canada is working to meet the housing demands of its citizens.
Dave Wilkes, BILD President & CEO commented, as growth continues to occur, municipalities need “laser focus on bringing supply to the market as quickly as possible, as the region prepares to welcome four million more residents by 2051.”
Categorised in: Real Estate
This post was written by Derek Timmons