<<< back to article list

Canadian Housing Market Update


Blog by Rod & Rhea Hayes | January 20th, 2012


Canada’s housing market posted moderate 
gains in 2011
The December home resales statistics published this morning by the 
Canadian Real Estate Association (CREA) showed that Canada’s housing market continued to advance at a modest pace at the end of 2011. 
Home resales rose for the fourth consecutive month in December, 
climbing 1.8% from November to a healthy tally of 476,900 units 
(seasonally adjusted and annualized). With the further reversal of part of 
the hefty property appreciation registered late in 2010 and early in 2011 
in the Vancouver and, to a lesser extent, Toronto markets, the average 
price of homes sold on the MLS system in Canada fell for sixth time in 
eight months. The national average price (seasonally adjusted) eased 
0.9% in December on a month-to-month basis. The year-over-year increase moderated to just 0.9% (using unadjusted figures), thereby representing the smallest such gain since October 2010. Excluding Vancouver and Toronto, the national average home price rose by 0.8% from 
November to December and 3.7% from December 2010. 
For 2011 as a whole, home resales totalled 457,700 units in Canada, up 
2.2% from 446,900 units in 2010. This was slightly below the 10-year 
average of 460,200 units, which indicates little in the way of market 
activity running either too fast or too slow. Overall, the Canadian market remained balanced with the sales-to-new listings ratio at 0.53 – close 
to the middle of the 0.40-0.60 range within which neither buyers nor 
sellers have the upper hand – and the number of months’ supply essentially remaining unchanged at 6.1. In December, the number of months’ 
supply edged slightly lower to 5.8 from 5.9 in November. Such balanced 
market conditions in 2011 sustained moderate price increases with the 
annual average national price rising 6.8% in 2011, the same rate of increase as in 2010. Excluding Vancouver and Toronto, properties sold on 
the MLS system in all other markets saw modest price gains of 4.1% in 
2011, which was less than the long-term average of 5.3%. 
Thanks to a spectacular run-up in a number of high-end neighborhoods 
in late 2010 and early 2011, Vancouver home prices posted the most 
significant increase among Canada’s largest urban centres for the second straight year in 2011, rising by 14.3%, following an even stronger 
gain of 15.5% in 2010. Well behind, last year, was Toronto with an annual price increase of 7.6%, just slightly ahead of Regina at 7.3%. All 
other major urban centres showed smaller rates of increase than the national average. Edmonton prices fell for the third time in the last four 
years. 
   
  Robert Hogue
  Senior Economist 
  (416) 974-6192 
  robert.hogue@rbc.com 
  
100
200
300
400
500
600
04 05 06 07 08 09 10 11
Home resales in Canada
Thousand units, S.A.A.R.
Source: CREA, RBC Economics Research
Annual change (%) 2011
Average pric e Home resales
Vanc ouver 14.3% 5.8%
Toronto 7.6% 4.0%
Regina 7.3% 8.9%
Total Canada 6.8% 2.2%
Winnipeg 6.1% 6.3%
Ottawa 4.7% -0.2%
Saskatoon 4.6% 13.1%
Montreal* 3.5% -4.8%
Halifax 2.7% 2.9%
Calgary  1.1% 7.0%
Edmonton -0.7% 3.4%
*based on first 11 months
Source: Canadian Real Estate Association, 
RBC Economics ResearchCURRENT ANALYSIS | Canada’s housing market update                                                                 January 16, 2012 
Looking at recent monthly trends, we note that the average home price 
in Vancouver has been softening since July last year, reflecting the 
reversal of some of the earlier strong gains. This softening trend drove 
the Vancouver average below its year-ago level in December for the 
first time since June 2009. In Toronto, the average price has stabilized 
since the start of summer. In December, the year-over-year rate of increase moderated to 4.3%, also the smallest advance since June 2009. 
Nationally, increases in average home prices sold on the MLS system 
have shown a slightly declining trend since reaching an all-time high in 
April last year. Excluding Vancouver and Toronto, however, the trend 
has been mostly flat since March. 
The picture painted by the latest statistics on Canadian housing continues to be consistent with an overall market that is showing moderation 
on nearly all fronts. Home resales grew a little stronger (2.2%) than we 
expected (1.4%) last year but not dangerously so. At the end of 2011, 
the national and the vast majority of local markets remained balanced. 
This is keeping price gains on a moderating path. The earlier troubling 
surge in prices in Vancouver is so far unwinding in an orderly fashion 
– although very strained affordability in this market will maintain intense stress on local homebuyers in the near term. 
We expect that widespread moderation will be sustained in 2012. Our 
latest projections published in November call for minimal growth in 
both home resales (0.4%) and prices (0.5%) overall in Canada, with 
strength in markets such as Alberta and Saskatchewan more than offsetting some softening in British Columbia. 
Canada’s housing market posted moderate gains in 2011

The December home resales statistics published this morning by the Canadian Real Estate Association (CREA) showed that Canada’s housing market continued to advance at a modest pace at the end of 2011. Home resales rose for the fourth consecutive month in December, climbing 1.8% from November to a healthy tally of 476,900 units (seasonally adjusted and annualized). With the further reversal of part of the hefty property appreciation registered late in 2010 and early in 2011 in the Vancouver and, to a lesser extent, Toronto markets, the average price of homes sold on the MLS system in Canada fell for sixth time in eight months. The national average price (seasonally adjusted) eased 0.9% in December on a month-to-month basis. The year-over-year increase moderated to just 0.9% (using unadjusted figures), thereby representing the smallest such gain since October 2010. Excluding Vancouver and Toronto, the national average home price rose by 0.8% from November to December and 3.7% from December 2010.

 For 2011 as a whole, home resales totalled 457,700 units in Canada, up 2.2% from 446,900 units in 2010. This was slightly below the 10-year average of 460,200 units, which indicates little in the way of market activity running either too fast or too slow. Overall, the Canadian market remained balanced with the sales-to-new listings ratio at 0.53 – close to the middle of the 0.40-0.60 range within which neither buyers nor sellers have the upper hand – and the number of months’ supply essentially remaining unchanged at 6.1. In December, the number of months’ supply edged slightly lower to 5.8 from 5.9 in November. Such balanced market conditions in 2011 sustained moderate price increases with the annual average national price rising 6.8% in 2011, the same rate of increase as in 2010. Excluding Vancouver and Toronto, properties sold on the MLS system in all other markets saw modest price gains of 4.1% in 2011, which was less than the long-term average of 5.3%. 

Thanks to a spectacular run-up in a number of high-end neighborhoods in late 2010 and early 2011, Vancouver home prices posted the most significant increase among Canada’s largest urban centres for the second straight year in 2011, rising by 14.3%, following an even stronger gain of 15.5% in 2010. Well behind, last year, was Toronto with an annual price increase of 7.6%, just slightly ahead of Regina at 7.3%. All other major urban centres showed smaller rates of increase than the national average. Edmonton prices fell for the third time in the last four years.      

January 16, 2012 2 Looking at recent monthly trends, we note that the average home price in Vancouver has been softening since July last year, reflecting the reversal of some of the earlier strong gains. This softening trend drove the Vancouver average below its year-ago level in December for the first time since June 2009. In Toronto, the average price has stabilized since the start of summer. In December, the year-over-year rate of increase moderated to 4.3%, also the smallest advance since June 2009. Nationally, increases in average home prices sold on the MLS system have shown a slightly declining trend since reaching an all-time high in April last year. Excluding Vancouver and Toronto, however, the trend has been mostly flat since March. The picture painted by the latest statistics on Canadian housing continues to be consistent with an overall market that is showing moderation on nearly all fronts. Home resales grew a little stronger (2.2%) than we expected (1.4%) last year but not dangerously so. At the end of 2011, the national and the vast majority of local markets remained balanced. This is keeping price gains on a moderating path. The earlier troubling surge in prices in Vancouver is so far unwinding in an orderly fashion – although very strained affordability in this market will maintain intense stress on local homebuyers in the near term. We expect that widespread moderation will be sustained in 2012. Our latest projections published in November call for minimal growth in both home resales (0.4%) and prices (0.5%) overall in Canada, with strength in markets such as Alberta and Saskatchewan more than offsetting some softening in British Columbia. 

Canadian Real Estate Association, RBC Economics ResearchCURRENT ANALYSIS | Canada’s housing market update