Two cities boast Canada’s ‘hottest’ real estate markets: report

Most cities across Canada have seen declines or flat home prices this fall, but some places have bucked the trend.

October marked the first time in more than two years that all major property types nationally were flat or down annually, according to the latest home price index report from real estate platform Wahi and Real Property Solutions.

Row/townhouse values slipped into negative territory and detached home prices, which were still rising in September, flattened, the analysis found.

Detached home prices, which make up over half of Canada’s housing stock, were flat year over year, while townhouses declined one per cent, semi-detached homes dipped two per cent year-over-year, and condo values dropped six per cent year-over-year.

“We saw more softness setting into the Canadian housing market at the national level this fall, with previously more resilient single-family home prices dipping,” said Real Property Solutions-Wahi economist Ryan McLaughlin. “However, the national numbers mask surprising and sustained strength in certain regions.”

Two cities stood out as Canada’s “hottest” housing markets — Winnipeg and Quebec City both posted 11 per cent year-over-year price gains in October, the report found.

Regina and Montreal both recorded the third-strongest annual increase at seven per cent. Regina was also the only major market where price appreciation accelerated compared to September.

For the last year, Quebec City has been leading all 13 major metro areas that Wahi analyzes in addition to the national price index. However, in October, it was joined by Winnipeg. In both markets, prices increased by 11 per cent from last year.

Wahi suggests that the relative affordability of these 10 cities, together with more favourable regional economic conditions, is helping drive demand and support elevated home prices.

Homebuilding activity in Quebec City has increased, but much of the supply is purpose-built rentals. A decade prior, ownership housing starts were far outpacing rentals. This shift has further fuelled competition over home ownership today, the report stated.

Conversely, Winnipeg’s drum-tight rental market may encourage some to purchase property rather than lease when possible. The city’s vacancy rate for purpose-built rentals has been trending below two per cent.

Toronto and Vancouver remain weighed down by weak condo prices, and detached home values in both markets were down three per cent year-over-year.

See the full report here.

Lead photo of Quebec City: Google Maps