Toronto and Vancouver home prices pass Rome and close in on Paris
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Canada’s two priciest cities for homes can now be included in an international class that is attracting foreign investors from around the world, says a new real estate study.
The report from CBRE says “prime” residential property in Toronto is now $1,225 per square foot while Vancouver is $1,368 per square foot. Those dollar figures have vaulted the city past some pretty impressive competitors like Rome and Milan. Similar property in Paris is $2,000 per square foot while the most expensive city in the study, London, comes in at $3,636 per square foot.
We’ve got some serious real estate here “We’ve got some serious real estate here. Very quietly we have climbed the global real estate ladder,” said Ross Moore, national research director for CBRE in Canada. “There are a whole bunch of reasons people are buying property but parking capital is one reason. You get your money out of Russia, get your money out of China. Pick your country. You want to diversify. In Canada, people want to educate their kids here so they want to buy somewhere for them to live.”
The question of how much foreign ownership is influencing the marketplace has been debated heavily in both cities. Evan Siddall, the president of Canada Mortgage and Housing Corp., told the Financial Post this month his research team is trying to get more information to fill in the “data gap” on what percentage of Canadian homes are being purchased by overseas buyers.
The CBRE study finds that foreign buyers are influencing markets around the world and specifically pointed to Toronto and Vancouver as attracting retirees looking for luxury, the only other Canadian cities referenced.
“Retirees are the new downsizers looking for a lifestyle change. This group are essentially empty nesters who are looking to trade grand estates for turnkey urban condos with instant luxury amenities,” says the report. “These buyers have been prominent in Canada for some time with luxury condos in Toronto and Vancouver becoming increasingly popular from this new segment.”
Related Toronto housing market still on fire, adding heat to national debate Vancouver home sales jump 15% in October from a year ago and prices are still climbing, too The CBRE report comes as new statistics from real estate boards in both locales show sales continue to climb with prices following. Toronto realtors are now calling for the large price gains we are seeing to continue well into 2015.
The Toronto Real Estate Board said Wednesday the average sale price in the region in October was $587,505, an 8.9% increase from a year ago. While condominium prices have slowed, the average detached home sold for $951,746 in October, an 8.7% increase from a year ago.
Tyler Anderson/National Post GTA sales were up 7.7% in October. “Strong growth in sales was evident across all major home types during the first full month of fall. This suggests that there are a lot of households across the Greater Toronto Area who remain upbeat about the benefits of home ownership over the long term, whether we’re talking about first-time buyers or existing home owners looking to change their housing situation,” said Paul Etherington, president of the board, in a release.
GTA sales were up 7.7% in October from a year ago, gains that follow reports earlier this week that Vancouver sales were up almost 15% during the same period.
Concern has been raised that Vancouver and Toronto, along with Calgary, are skewing the national price figures which are due out on Nov. 15, a sentiment that even Finance Minister Joe Oliver has expressed. The government has intervened four times to tighten mortgage rules and cool the market but Mr. Oliver has so far rejected further regulation.
Analysts have suggested Ontario’s provincial land use policy encouraging intensification has helped fuel prices for single-family detached homes in Toronto.
“While sales growth has tracked strongly so far this fall, many would-be home buyers have continued to have difficulties finding a home due to the constrained supply of listings in some parts of the Greater Toronto Area, particularly where low-rise home types are concerned. The resulting sellers’ market conditions are forecast to drive strong price growth through the remainder of 2014 and indeed into 2015 as well,” said Jason Mercer, TREB’s director of market analysis.