Vancouver’s real estate prices drop—will Toronto’s be next?
With repeat warnings that Toronto, like Vancouver, Montreal, Calgary and other Canadian cities, may (emphasis on may) be trapped in a housing bubble, signs of a softening real estate market in other cities can be something of a canary in the coal mine. So when word came out yesterday that the Vancouver housing market—one of the strongest in the country—dipped last month, we took note.
Vancouver’s recovery has far outstripped that of other Canadian cities, with prices jumping 21 per cent in the past year alone – more than double the gains seen in the rest of the country.
But the latest home-sales figures point to a slowdown. The number sold dropped 21 per cent in July from June, and prices edged 0.1 per cent lower to $630,251 for a typical detached house, according to the Real Estate Board of Greater Vancouver. Listings of properties for sale in the city are increasing, while bidding wars are becoming less common.
The slowing real estate scene in Vancouver is adding to concerns that the rest of the country’s housing market will cool off as well against a backdrop of global economic uncertainty and gyrating financial markets.
Sure enough, later that same day news broke that Toronto’s market had cooled as well. In fact, from on month to the next, the market here has cooled even faster than Vancouver’s, which is surprising given that Vancouver has recently looked more like it’s in a bubble state than Toronto. Of course, nobody seriously thinks Canadian real estate isn’t overvalued to some extent, so the question for Toronto isn’t whether or not home prices will fall—it’s by how much before the market recovers. Which, in turn, raises another question: when exactly is that?