While Alberta reverses, B.C. and Ontario continue real estate surge

The Canadian housing market is off to a very strong start to 2016, having registered the highest sales levels since 2007.

Fully 75% of local Canadian real estate markets are experiencing year over year sales growth.

While the Alberta and Saskatchewan real estate markets (for example, Calgary price drops almost 3.5 percent in February over February 2015 and Saskatoon dips nearly 3 percent) suffer the brunt of the oil price collapse, most of the rest of Canada is doing just fine.

The majority of the Canadian real estate market has a strong/stable status while the Lower Mainland of B.C. is extremely strong. The Vancouver region is at the virtual ceiling of a “sellers’ market”, which is at a 60 percent sales-to-new-listing ratio and year over year sales increasing by more than 20 percent.

Ontario as a whole is experiencing a positive real estate market. The Greater Toronto Area (GTA) is also hot at barely under “sellers’ market” territory and has experienced strong price growth of more than 10 percent year over year.

British Columbia has the strongest growth in the country and is experiencing a trickle-down effect from the sizzling Lower Mainland market. As was experienced in the early 1990s, high prices in Vancouver and Richmond allow homeowners to cash out and take their equity to other markets such as South Surrey and White Rock, paying off mortgages and upgrading their homes. This time around, we are again seeing this transfer of equity as the Fraser Valley is picking up steam and Victoria is approaching 10 percent growth in early 2016.

Outside of the major markets, Canadian real estate is generally in positive territory, while Canmore remains the only positive market in Alberta.

Both the B.C. Lower Mainland and the GTA are expected to continue to lead Canada’s real estate scene with the balance of B.C. and Ontario benefiting from the trickle-down effect. The balance of the country can look for positive price growth and mostly balanced markets while Alberta and Saskatchewan hope for growth in the price of oil, which would help stabilize those markets.