Sales of existing residential properties in Canada increased by 5.2% in February compared with the previous month, marking the highest monthly level of activity since April 2016, according to new data from the Canadian Real Estate Association (CREA).
The industry group, which represents estate agents in Canada, said activity increased in almost three-quarters of all local markets, led primarily by sales in the Greater Toronto Area where property prices have risen sharply in recent months.
Higher home prices in the Greater Toronto Area are now rippling out into nearby markets, especially those within commuting distance, with many prospective home buyers currently looking for cheaper alternatives in Hamilton, Barrie, Guelph, and as far afield as the St. Catharines-Niagara region, driving prices upwards in the process.
“In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings,” said CREA’s chief economist Gregory Klump.
“As a result, they aren't putting their current home on the market. It's something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up homebuyers alike,” he added.
House price growth in Greater Toronto, along with Greater Vancouver, helped to drive up the average price of a home in Canada by 3.5% in February to reach an average of $519,521 (£315,700).
“That said, Greater Vancouver's share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price,” CREA said.
If the two cities are stripped out, the value of the typical Canadian home would drop by over $150,000 (£91,150) to $369,728 (£224,680).