Canadian real estate prices have been on a tear, but most of the gains are in condo apartments. Statistics Canada (Stat Can) release its Residential Property Price Index (RPPI). The result for Q3 2019, show Canada’s largest cities have seen a large movement in home prices recently. The large movement is due to condo apartments, which are growing over 3x faster than houses.
The Residential Property Price Index
The Residential Property Price Index (RPPI) is Stat Can’s new stab at measuring prices. It contains the inflation adjusted prices of new and resale homes. It’s also broken down into house or condo apartments. The RPPI includes six cities as of now – Montréal, Ottawa, Toronto, Calgary, Vancouver and Victoria. Since it’s an index and not a benchmark, it only tells you the direction of prices, and how much prices have changed. It unfortunately doesn’t tell you how much you should be paying for a house. Got it?
Canadian Real Estate Prices Are Up Less Than 1%
Real estate prices in Canada’s major cities aren’t moving a whole lot these days. The index of all housing types, increased 0.19% in Q3 2019. This brings prices up … well, 0.19% from a year before, and up 9.22% since the index started in Q1 2017. More than half of the index increase occurred in Q2 2019. Things moved just a touch above inflation for the rest of the time.
Canadian House Prices Are Up Over 5% Since 2017
Breaking that down by segment, we can see house prices are rising a lot slower than condo apartments. House prices increase 0.20% in Q3 2019, and are down 0.59% from the same quarter last year. From the start of the index in Q1 2017, prices are up 5.84% at the end of Q3 2019. These are large gains, just not the mind-blowing increases seen in condo apartments.
Canadian Condo Apartment Prices Are Up Over 18% Since 2017
To contrast, condo apartment prices are slowing down more recently – but made a huge climb. Condo apartment prices fell 0.18% in Q3 2019, but are up 2.11% from the same quarter last year. From the start of the index in Q1 2017, prices are up a surreal 18.89% at the end of Q3 2019. Once again, the increase for condo apartment prices is over 3x the size of houses.
Canada’s largest cities are seeing prices rise rapidly, but mostly in a single segment. Condo apartment prices are accelerating much faster than house prices. It’s almost like the concept of a ghetto tax, has been extended to all first-time home buyers.
By Daniel Wong www.betterdwelling.com