Canadian real estate prices have spiked to a new high. Canadian Real Estate Association (CREA) numbers show prices across the country ripped higher in March. Despite the good news for sellers, gains are tapering at an alarming rate.

The Price of A Typical Home In Canada Has Never Been Higher

The price of an aggregate benchmark (a.k.a. typical) home, made a huge single month leap in March. The benchmark reached $652,400 across Canada, a 1.14% increase from the month before. That represents a 4.6% increase compared to the same month last year. The benchmark is now printing an all-time high, beating the previous record set last July. Remember, this is an aggregate benchmark, which includes condos as well. Not just detached homes.

Source: Statistics Canada. Better Dwelling.

Canadian Real Estate Price Gains Are Rapidly Decelerating

The increase has a few caveats worth noting, one of the most interesting being price deceleration. The annual increase of 4.6% is a huge gain, but it’s the lowest increase since December 2013. People should also note how quickly this trend is tapering. The rate of growth has declined 74.78% over the past 11 months. The gain is very large, but the pace at which they’re declining should be read as a sign of caution.

Source: Statistics Canada. Better Dwelling.

But… Toronto Real Estate Prices Are Falling

We know, Toronto’s composite prices are falling, how can the rest of the country be increasing? The aggregate benchmark price is a weighted index of cities by regions, and Toronto sales are declining very quickly. Toronto sales represented 21.3% of sales in the country last year, and only 16.5% of sales this year. Smaller regions are seeing sales rise, and prices with them. This brings up the floor of prices across the country, as lower priced homes in far off regions disappear. Too wordy? Lower priced markets (like Edmonton) climbed last month, meaning the cheapest homes in the average are rising.

Source: CREA, Better Dwelling.

National prices aren’t all that useful for homebuyers looking for local pricing. Just because home prices are falling in Toronto, doesn’t mean you give a damn in Calgary. However, rising prices across the country, likely mean Toronto and Vancouver’s buyer exuberance has spread to other regions. When even Edmonton is at risk of overbuilding, but seeing prices climb – we’re seeing a national exuberance problem getting worse.

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