Market Commentary
TORONTO & VANCOUVER: THE HOUSING MARKETS THAT HAVE ALL EYES WATCHING
June 18, 2012 | Posted by: Francine Tracey
Highlights
• The nation’s two biggest housing markets, Toronto and Vancouver, seem to have diverged in recent
months with the pace of sales slowing and prices declining in Vancouver, while the Toronto market
has a full head of steam.
• However, average price changes can be deceiving and other measures indicate the divergence is
less dramatic.
• The real parting of the ways seems to be between the market for single-family homes, where limited
supply has kept prices firm, and the condo market, where construction booms have kept price
increases more modest for both markets.
• In the near term, we expect the divergent fortunes of these big-city markets to diminish, but longer
term both markets are likely 15% overvalued. Inventory levels that are already high (Vancouver), or
set to head higher (Toronto) make the condo market the bigger concern in both cities.
After ten years of a housing boom in Canada, we are a nation obsessed with house prices, and the
question of how much longer they can continue to rise. Nowhere more so than in Vancouver and Toronto,
the largest markets that have carried a big weight in the national picture (throughout this report Toronto
and Vancouver refer to the CMA region). Early in 2011, the most commonly watched real estate data
collected by the Canadian Real Estate Board (CREA) showed that big price increases in Vancouver were
inflating the national tally, and now average prices in Vancouver are falling on a year-on-year basis.
Meanwhile Toronto seems to chug along at a high single-digit year-on-year pace. What is behind these
headlines? Is Vancouver a housing bubble in the process of popping, while Toronto continues to inflate?
This paper will explore the similarities and differences in the two markets and how their outlooks compare.
Click here to read the entire report from TD Bank.