Vancouver weighs on market as average price of homes fall

OTTAWA, ON (NEWS1130) – The high-end housing markets of Toronto and Vancouver headed in opposite directions last month as the average price of a Canadian home fell.

The Canadian Real Estate Association says there were fewer sales over $1 million in Vancouver in March weighing on the national average, while high-end sales in Toronto picked up the pace.

“You’ve got a tug-of-war,” Gregory Klump, CREA’s chief economist. “A year ago at this time, high-end sales in Vancouver were running at unusually high levels and they’ve since fallen back to earth and as a result you’ve got a year-over-year decline in average prices.”

Meanwhile in Toronto, Klump says sales of single detached homes over $600,000 as a percentage of total sales have picked up as well as the high-end condo market.

The national average home resale price in March was $369,677, down from just under $373,000 in February and $371,591 in March 2011.

That compared with an average residential price in Toronto last month of $504,117, up from $456,147 in March 2011, and an average residential price of $761,742 in Vancouver last month, down from $786,311 in March 2011.

However, Klump notes that the number of sales across the country reached their highest mark in nearly two years.

BMO deputy chief economist Douglas Porter stresses Toronto is not Canada, nor is Vancouver.

“For most cities, the market looks well balanced, and is broadly moderating on its own accord.”

The busy spring real estate market comes as both Finance Minister Jim Flaherty and Bank of Canada governor continue to raise concerns about household debt.

Last month, several of Canada’s big banks raised their posted mortgage rates signalling that the era of cheap borrowing may be drawing to a close.

The central bank’s policy rate has been set at one per cent since September 2010, low by historical standards. The rate is expected to remain unchanged tomorrow when the Bank of Canada makes its latest policy announcement.