The Canadian Real Estate Association (CREA) reported a rise in benchmark prices by 0.5% in September from August. Prices rose by 1.3% year-over-year. The benchmark prices for 19 cities tracked by CREA is approximately $629,200. The benchmark is the best metric used for measuring house prices as it eliminates outliners at the top and the bottom of the market. Average home prices, in comparison rose to $515,500, an increase by 5.3%, year-over-year.

In recent months, home prices have generally been stabilizing in the Lower Mainland and the Prairies, where previously they were falling. Cities in British Columbia and the Prairies were the only ones to post declines, with the Lower Mainland down 6.41%, Greater Vancouver down 7.28% and Fraser Valley down 4.68%. Calgary (-2.36%), Edmonton (-2.25%), Regina (-3.95%) and Saskatoon (-1.13%) were all also in a slump.

The difference between the two regions, however, is that prices in BC had more than doubled over the past 5 years prior to its downturn. Whereas, the prairies have seen a more sustained downturn due to falling oil prices and an oversupply of housing.

The housing markets on the other side of the country have followed a very different trajectory. Nearly all markets in Ontario and the Maritimes rose significantly, both over the past year and also over the past five years.

The difference between the eastern and the western markets seem to be the balance between supply and demand. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers ample choice in these regions.

Sales continue to outpace new listings. National home sales rose 15.5% year-over-year. Meanwhile, sellers still appear hesitant to put their house on the market—new listings edged up less than 1%. The sales-to-new listings ratio, which measures competition, keeps rising and now stands at 61.3%, well above its long-term average of 53.6%.

All this indicates that the housing market is becoming increasingly tough for prospective buyers, who are competing with more buyers for fewer properties. This can lead to price increases, bidding wars and pressure to leave out conditions in offers. Until supply increases (or demand wanes), CREA expects long-term price gains in British Columbia, Ontario and the Maritimes.

Source: Canadian Mortgage Trends