Vancouver is not all that far from Seattle and Toronto isn’t all that far from New York, but the real estate markets are very different in the United States and Canada. According to an analysis in The Globe and Mail, while Americans earn a little less than Canadians on average, the cost of living in Canada is much higher. One of the major drivers of that is real estate. Let’s take a look at what has been happening lately in the real estate market to our north.
It’s Hard to Get a Foot in the Door
While Canada is geographically larger than the United States, 75% of the Canada’s 36 million residents live within 100 miles of the United States border. About half of the Canadian population lives in Toronto, Montreal, Vancouver, Calgary, Edmonton, and Ottawa. This makes those population centers highly desirable and very expensive.
15,000 Canadians gathered in Toronto for the Real Estate Wealth Expo. The expo featured speakers, including local agents, and exhibits all about buying your first home. But home prices are skyrocketing and that is holding younger buyers and first time buyers from owning homes and getting their foot into the door of real estate.
Average Home Prices are Too High
According to the Canadian Real Estate Association, the average home price in March, 2017 was $548,517. That is about $402,000 United States dollars. That is an 8.2% annual increase over March, 2016. In the United States, the average home price is around $250,000.
But looking at the Canadian real estate average is not the best metric. As we know, most people prefer Canada’s largest cities. In Toronto, the average home price is $916,567 ($672,000 USD) and in Vancouver it is $991,690 ($727,000 USD). Sure, you can pick up a cheap home in the Yukon or Northwest Territories, but that far North your neighbors may include the local bear and moose population. Homes in Canada’s most desirable cities have similar pricing to New York and San Francisco. Toronto’s prices were up 33% in the last year. They make hot American markets like Denver, Portland, Austin, and Raleigh look cheap!
Is Canadian Real Estate in a Bubble?
BuzzBuzzNews reports that Canadian home prices are on track to level off. There is a 40% chance of cooling Canadian real estate markets. But with crazy price increases and a high cost of living, this kind of growth is certainly not sustainable.
Canadian news site BNN reports that there is strong evidence of overvalued real estate. While some Canadian real estate markets have cooled, as is the case in cities like Regina. But others like Toronto and Vancouver remain very high compared to any prior statistics.
This may indicate that Canada, or at least Canada’s largest cities, are in a real estate bubble. If home prices grow too quickly over a relatively short period of time, it is inevitable that prices will come down a bit. Hopefully Canada’s real estate woes are not as bad as The Great Recession and real estate crash that happened about a decade ago in the US.
Trusted, Knowledgeable Agents are Key
While the Canadian real estate market has a handful of differences from the United States market, one thing is very similar: the need for a high quality agent. A trusted real estate agent is your best partner in buying a home. They can help ensure you don’t pay bubble pricing for a home that is about to be worth less, or can help you find the best home for your needs for the long-haul.
If are about to search for a home, start with a search for the best real estate agent. For the best agent, head to AgentHarvest.