Canada ranks in the world’s top 4 housing markets for price growth

The rapid-pace at which Canadian home prices are rising is no longer solely a national phenomenon. A study published by Scotiabank on Thursday found the country’s housing market now ranks among the most lucrative in the world in terms of year-over-year price gains.

Primarily driven by record low interest rates and high demand for real estate in the country’s major metropolises – namely Toronto and Vancouver – the news came ahead of a record 8.3 per cent price surge experienced in the second quarter of 2015.

Only three countries ranked above Canada: Ireland, Sweden and Australia, which each saw price growth of 13.3, 10.1 and 8.3 per cent respectively for the same time-frame.

Canada’s 8.3 per cent price spike did come well ahead of the U.S.’s 5.4 per cent increase however.

The seven page report traced home prices across a total of 23 countries, after making adjustments for inflation.

Authored by Adrienne Warren, the report also tapped into trends that have come to define Canada’s real estate landscape, including the fact that benchmark prices of single-family detached homes boast roughly a 75 per cent premium over condominiums, while townhomes are priced an average of 50 per cent more than their high-rise counterparts.

The move towards greater densification in Canada’s urban centres, both as a means to curtail lengthly commute times and in response to demographic shifts inclining many towards one-person households, were highlighted as well.

“The growing trend toward higher-density living, not just in Canada’s largest urban centres but in mid-sized cities as well, has been well established for over a decade,” reads the report.

The strength of the country’s high-rise market was pinned to high rental demand among millennials and immigrants. “The national average rental vacancy rate has edged only modestly higher over the past year, and remains low at 3.3% for purpose-built apartments and just 2.3% for condominiums,” details the Scotiabank study.

Demand among foreign buyers was also attributed as a key factor to the fledging market, with a weakened dollar driving international investment into the Canadian housing market over other countries where foreign exchange has fared better.

Top 10 Global Housing Markets

Countries ranked in order of Year-Over-Year Price Change in Q2, 2015

1.Ireland – 13.3%
2.Sweden – 10.5%
3.Australia – 8.3%
4.Canada 8.2%
5.U.K.- 5.6%
6.U.S. – 5.4%
7.Chile – 4.8%
8.Germany – 4%
9.Thailand – 3.6%
10.Switzerland – 3.4%

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