Home prices rise faster in Saskatoon than Vancouver
April 5, 2021
Vancouver home price hikes during the year-old pandemic may seem high, but the increase is minor compared to metropolitan centres like Medicine Hat and Saskatoon.
In fact, Vancouver’s price gains over the past year have lagged behind most other Canadian jurisdictions as well as those in the United States.
Canada’s home prices have jumped 17.3 per cent, whereas Greater Vancouver’s have risen just 6.8 per cent between February 2020 and February 2021, according to the Canadian Real Estate Association. U.S. house prices rose 10.8 per cent from December 2019 to December 2020, according to the Federal Housing Finance Agency House Price Index.
The City of Vancouver composite benchmark home price is 2 per cent higher now than a year ago, but Saskatoon’s composite home price is up 9 per cent from February 2020. Home prices increased 20 per cent in Medicine Hat, Alberta. In tiny Powell River, a mill town 100 kilometres northwest of Vancouver, the composite home price is 27 per cent higher now than a year ago.
It could be a lack of foreign buyers—driven away by a high foreign-homebuyer tax and COVID-19—that have kept Vancouver price hikes modest.
Foreign purchases are down significantly in B.C. since the tax on foreign homebuyers increased to 20 per cent in February 2018 and immigration has virtually vanished during the pandemic.
In addition, local buyers have more ability to pay because Bank of Canada interest rates are at an all-time low of 0.25 per cent, which has kept mortgages rate hikes in check.
For example, on March 15 , HSBC was offering a 0.99 per cent 5-year variable rate on mortgages up to $300,000—good until July 12, 2021.
Canada’s central bank has indicated low rates are here for the near term—at least until 2023.