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20 Apr

Pricey property surge drives average up

General

Posted by: Mike Hattim

Strong sales in Canada’s most expensive market helped push the average price of a home across the country up 8.9% last month from a year earlier, the Canadian Real Estate Association said.

The Ottawa-based group, which represents about 100 boards across the country, said the average sale price of a home was $371,286 in March.

But CREA cautioned that Vancouver was driving the numbers because of strong activity “in a few pricey areas.

“A record number of multi-million dollar property sales in Richmond and Vancouver West are pushing up average prices for Greater Vancouver, British Columbia and nationally,” said Gregory Klump, chief economist at CREA. 

“If Vancouver is excluded from the equation, the national average price increase is cut by more than half to 4.3%.”

CREA said that new mortgage rules that made it harder to borrow pushed housing sales forward and that affected condo sales in Vancouver in particular.

However, Mr. Klump said long-term the impact of the new rules will be minimal. Among the changes was a shortening of the length of amortization from 35 years to 30 years which has the effect of increasing monthly payments.

“Interest rates are now widely expected to remain on hold until at least mid-July, which is supportive for resale housing demand, market balance and prices,” said the economist, about another positive for real estate.

Overall, sales in March remained steady, down just one tenth of a percentage from February levels. National sales for the first three months of 2011 are very close to their five and 10 year averages, CREA said.

The number of months of inventory was 5.6 months at the end of March, unchanged from February. The numbers represent the number of months it would take to sell current inventories at the current rate of sales activity.