Canada’s real estate market has seen an astonishing run of prices that has seen the average price of a home go up almost 30 per cent in just two years.
That’s an increase of over $2,000,000 (AUD$2,600,000) in the last two years, according to data released this week by the Canadian Real Estate Association.
The average home price in the country has been on an average of $5,955,000 over that period, according a report from the agency.
The median price of an individual home is now $2.5 million (AUD $2 million).
The increase is in stark contrast to last year, when prices rose just over 10 per cent, and are still at record highs.
“The average price is up 15 per cent over last year,” said the report, which is based on a survey of 1,000 respondents.
“We’re in the midst of a real estate boom that’s seen the market go from $1.3 billion in 2012 to $4.5 billion in 2017.
This is an absolutely phenomenal market.”
It’s also likely to continue on a trajectory that is not sustainable. “
There is plenty of room for prices to come back up, but the market is still very much at the crossroads of a new, post-recession, long-term pattern.”
It’s also likely to continue on a trajectory that is not sustainable.
“It’s going in the wrong direction.
It’s going into the wrong tailwinds,” said Andrew Fenton, an economist with the Canadian Centre for Policy Alternatives.
“In other words, it’s just going to accelerate even more.”
The growth in the cost of real estate The average price in Toronto has climbed by almost 30.8 per cent since 2013, and it’s not clear whether that’s a trend, or a reflection of the strength of the economy.
Prices in the city have seen an acceleration of about 5.8 percent in the past five years.
In Vancouver, prices have gone up by nearly 6 per cent and are now on average $4 million (USD $3 million).
The average home in Toronto, however, has not gone up nearly as fast as in Vancouver, with the average asking price in 2015 still sitting at $2 and $3.5m respectively.
In comparison, the average house price in Vancouver has gone up about 10 per and 12 per cent from 2015.
In other parts of Canada, prices are actually lower than they were a year ago.
The Toronto Real Estate Board has reported a 10 per, 16 per, and 25 per cent drop in average asking prices, respectively, over the last year.
There is some evidence that the price increases are driven by factors beyond the economic downturn, though.
As a result of a recent survey, almost half of respondents said they believed the market would continue to be strong for the foreseeable future.
However, many of those respondents are also optimistic about the economy, which was one of the main reasons they chose to live in Toronto.
“I think it’s probably the strongest economic sector for the next 10 to 15 years, but also one of our weakest,” said Daniel Gagneau, a managing director at Toronto-Dominion Bank, a financial institution that focuses on the Toronto region.
This article first appeared on The Conversation.