Housing Boom Slowing Down

The housing boom is slowing down in Central Canada but Western markets continue to soar. Major markets such as Toronto, Ottawa and Montreal are taking a breather as price increases are moving closer to the rate of inflation and multiple offers are less frequent.

Western Canada is a different story, with price increases in the hot Calgary market hitting levels never seen before in close to three decades of record keeping by the Canada Real Estate Association. The average price of a two-storey home in Calgary is up more than 54 % in the first half of this year compared with a year earlier, according to Royal LePage.

Average home prices in Calgary are now reaching Toronto levels and are expected to pass Toronto by the end of the year. The major factor behind the growth is fuelled by the booming energy sector.

In the rest of Canada, it is expected the moderating market conditions will last. But that balance could be upset if the central bank overshoots its targets in raising rates.

The year-over-year increase in average price for Toronto was 5.5 % in May, the most recent numbers from CREA show. In Ottawa it was 4.7 % and 8.2 % in Montreal. That's in sharp contrast to Calgary, where the number jumped by 43.6 %.