Canadian House Prices Hit Record High Amid 'Oversupply' Warning + MORE Jun 12th

Canadian home prices hit a record high in May despite signs of an “oversupply” in many markets, National Bank Financial said Friday.

The Teranet-National Bank House Price Index showed house prices rising 0.9 per cent in May from the month before. They were up 4.6 per cent in a year.

All but one of the 11 urban markets measured in the index saw prices rise in May, with Calgary being the exception. The city saw a record house price drop of 3.3 per cent in the space of a month. Prices there are down 5 per cent from their peak, reached last October.

While May was a strong month, the index shows many cities are still down from their peak prices, including Ottawa, Montreal and Winnipeg. Vancouver, Toronto, Hamilton and Quebec City all hit record high prices in May.

National Bank senior economist Marc Pinsonneault says the crash in Calgary house prices has been largely concentrated in the upper end of the market, with the lower-end condo market holding up relatively well.

That’s because “low mortgage rates mostly support demand for lower-priced homes,” he wrote…

(Mike Kemp/Getty Images)
Canadians with consumer debt were better at making payments on time in the first quarter of this year than they were in the same period over the previous two years, according to the TransUnion credit monitoring agency.
It says the delinquency rate on non-mortgage debt like credit cards, auto loans and lines of credit was down in the first three months of 2015, even though the average balance owing remained stable at just under $20,800.
The delinquency rate fell to 2.66%, down from 2.72% in the same period a year earlier and 2.87% in the first quarter of 2013.
Jason Wang, TransUnion’s director of research, says one of the reasons for the decline was that lenders and borrowers were increasingly cautious.
Wang says another factor was the Bank of Canada’s decision to reduce a key interest rate in January following a collapse of global oil prices that started in late November and continued into this year.
He says the central bank’s move reduced mortgage costs for some homeowners, who used the savings to manage their other types of debt…

RateSupermarket.ca finds buyers can expect to pay $3,000 more monthly to move up in the market 

(Toronto, Ontario): June 10, 2015: In Canada’s most competitive markets, steep affordability often limits first-time buyers to condo or townhome purchases. While these dwellings are traditionally considered to be “starter homes”, many buyers are in it for the long haul, as rising prices push a larger abode out of financial reach.

RateSupermarket.ca, Canada’s comprehensive rates comparison resource, finds homeowners looking to upgrade from the average condo to a detached house in Toronto and Vancouver can expect to pay at least $3,000 more each month in mortgage payments – even with today’s record low fixed mortgage rates.

Increase in mortgage payments per dwelling type: 

City
Average Condo Resale Price
Average Condo Mortgage Payment (2.74% 5-year fixed)
Average Detached House Resale Price
Average Detached Mortgage Payment (2.74% 5-year fixed)
Difference in Monthly Payments

Toronto*
$422,947
$1,946
$1,115,120
$5,130
$3,184

Vancouver**
$396,900
$1,826
$1,104,900
$5,083
$3,257

Buyers are Discouraged – But Not Dissuaded

According to RateSupermarket…

Canada’s mortgage market is an evolving landscape – and home buyers need to stay vigilant to remain competitive. This week, the spotlight is on shrinking affordability in real estate; the average house price of over $1 million in some markets certainly doesn’t reflect the income growth of our nation’s typical buyer.
And it’s not easier once you break into the market – our recent study finds those upgrading from a condo to a house in Toronto and Vancouver face an average income gap of over $3,000. Read on for the full story.
Stuck In The Starter Home
We know times are tough for Canada’s first-time home buyer – but they can be even more dire for those looking to move up in the market. The price gap between condos and detached homes has growth so wide, that upgrading to a larger abode is out of financial reach for many – even with the equity they’ve built up from their first home. What options do these buyers have? Read on for the full story.
Read Penelope’s Blog | Stuck in the Starter Home
Prep For a Fall Home Sale With 3 Summer Renos
Thinking of putting your home on the market come fall? Summer is the perfect time to add a few improvements, and get your property into top selling shape…

After living in a condo for four years, Susan is having second thoughts about condo living