The average price of a Canadian home was $481,500 last month, a rise of one per cent in the past year.
July marked the first time this year that average house prices eked out an annual increase, the Canadian Real Estate Association said Wednesday, as the impact of tougher mortgage rules implemented earlier this year is starting to wane.
“This year’s new stress test on mortgage applicants continues to weigh on home sales, but its effect may be starting to fade slightly in Toronto and nearby markets,” said Barb Sukkau, the realtor group’s president. “The degree to which the stress test continues to sideline home buyers varies depending on location, housing type and price range.”
After years of annual increases that frequently touched the double digits, Canadian house prices have cooled considerably in recent months, especially after the implementation of the new mortgage stress test rules thathold borrowers to higher income standards, which has resulted in less borrowing or taking some people out of the market entirely.
July also saw the total number of homes sold during the month decline compared to last year, by 1.3 per cent.
CREA says the average isn’t the most accurate way of assessing house prices because it’s skewed by activity in big cities like Toronto and Vancouver, and by certain types of housing. So it calculates another number — called the Multiple Listings Service Housing Price Index (MLS HPI) — that is says is a better gauge of the overall market because it strips out all the volatility.
By that metric, house prices in Canada have increased slightly in the past year, by 2.1 per cent up to July.
Markets in B.C. continue to post strong gains: 6.7 per cent in Greater Vancouver, 13.8 per cent in the Fraser Valley and 8.2 per cent in Victoria.