If you live in Toronto or Vancouver, it might come as a surprise that Canada’s home prices have experienced a slowdown. HuffPost Canada reports that this is part of a larger trend in the global housing market.
The Knight Frank Global House Price Index, a U.K. property consultancy, which ranks countries by annual home price shows that, in this last quarter, Canada placed 49 out of 56 in national housing markets. This means that, on a national scale, Canadian home prices only rose by 0.5 per cent compared to this quarter last year.
While this might be good news for would-be homebuyers, it’s bad news for the economy overall. The only increasing markets that placed lower, for example, were Poland at a 0.4 per cent rise year-over-year and Brazil and Switzerland, where prices moved at a snail’s pace of just 0.2 per cent per year. It’s a dramatic shift considering three years ago, Canada ranked third in Knight Frank’s Q2 2016 roundup. Canada’s increasing market, while small, beat out other countries where prices actually decreased.
“Only four markets registered a decline in annual prices,” explained Kate Everett-Allen, Knight Frank’s head of international residential research, in the report. “However, with two interest rate cuts this year, new lending stimulus in place and prices bottoming out, we expect Australia to rise up the rankings in the second half of 2019.”
Despite the national trend, key markets like Toronto and Vancouver showed accelerated home sales, which makes Canada’s urban centres virtually fail-proof. The most recent data collected by the the Canada Mortgage and Housing Corporation showed that as of July 2019, home sales across the country had increased 12.6 per cent annually and 3.5 per cent within the past month.
Robert Hogue, a senior economist for RBC, told HuffPost Canada that “Canada’s housing market correction is over and the recovery is on.” That doesn’t make it any easier to find housing, especially for those looking to rent. Nor will it help millennials out of their struggle to finance a home within the urban centres they most crave to live.
With key markets in Canada accelerating, its place in the global home price marketplace is sure to rise. It’s news that very few Torontonians will applaud.