The housing rush has spread to Montreal, Quebec
Canadian home prices continue to soar despite growing concerns that the country’s real estate market has become overheated, or even bubbling.
According to data released Thursday by the Canadian Association of Realtors, more than 70,000 homes closed for sale in March, 22,000 more than the all-time high sales figure for March.
In fact, home sales in Canada have been rising strongly since the first wave of the COVID-19 virus pneumonia outbreak began to abate last May.
There has also been a staggering rise in home prices. Figures from the Canadian Association of Realtors show that the average home price in Canada was $716,828 in March, a 31.6 per cent jump from a year ago, setting not only a record for home prices but also a record for the highest rate of price increases in history.
Figures collected by the CBC show that the average home price in British Columbia, the highest of Canada’s 10 provinces, is $915,000, Ontario, the second-highest province, is $862,000, Quebec, the third-highest province, is $444,000, and Newfoundland, the lowest province, is only $256,000.
While home sellers and homeowners alike are glad that the homes they bought years ago are appreciating exponentially, economic analysts and policy makers are concerned that first-time homebuyers are out of touch with the housing market; they either can’t afford to buy a home, or they can’t afford the mortgage payments once interest rates rise.
Last week, Canada’s financial regulator recommended that commercial banks begin strict mortgage stress testing standards in June. Experts believe that if this measure is implemented, the ability of homebuyers to raise money for home loans will be reduced by 5%.
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