Canadian housing market hits $508,097 average price in April as sales rise to record

Canada's housing market continues to set new records, with the average sale price up to $508,097 in April,the busiest month for home sales in Canadian history.

The Canadian Real Estate Association says the average house price increased by more than 13 per cent in the year ended in April.

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CREAhas said for several months in a row that the average price is skewed higher by the hot and large markets of Toronto and Vancouver. Stripping those two citiesout, the national average drops to$369,222 and the year-over-year gain is reduced to 8.7 per cent,CREAsaid.

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CREAsays the average figure is misleading, so it calculates something it calls theAggregate Composite MLSHouse Price Index, and contends it's a fairer representation of the real market, by blending together all housing types.

Even on that more normalizing scale, the CREA index rose 10.3 per cent in April, its biggest gain in almost six years stretching back to May2010.

Here are the eye-poppingnumbers for some areas in and around Toronto and Vancouver:

• The Greater Vancouver Area's index increased by 25.3 per cent
• The nearby Fraser Valley increased by 25.6 per cent
• Prices in the GTA were up by 12.6 per cent
• Victoria was up12 percent
• Vancouver Island prices wereup by8.2 per cent.

By way of contrast, prices declined by3.5 percent and 2.4 per cent in Calgary and Saskatoon, respectively, which are smaller declines than those posted by these markets in March.

But it's not just prices that are spiralling.Sales volume was also red hot, with 70 per cent of all markets showing gains. Two notable exceptions were Toronto and Vancouver, where new mortgage rules implemented in February appear to have slowed down the selling frenzy. In Toronto, the April sales figure was flat compared to March. In Vancouver, it declined by one per cent. But prices were still sky high in both places due to limited supply.

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And Toronto and Vancouver are the exception to the rule as the national sales figurerose to itshighest level ever in April.

Houses are selling so fast on a national basisthat inventory has been pushed to its lowest level in more than six years, at 4.7. (That number representshow longit would take, in months, at the current sales pace to sell all the houses currently on the market.)

Bank of Montreal economistRobertKavcic said Monday that the large nationalfiguremasks wide regional variances across the country.

"Of the 26 major regions covered, six saw double-digit average price gains in April, 10 saw outright declines, while the median city was running at 1.4 per cent,"Kavcic said.

"It's business as usual in Canada's housing market, with extreme strength in Toronto and Vancouver, corrections playing out in the oil-exposed markets, while most others fall somewhere in between.With supply in the two hot markets extremely tight, and policymakers barely testing the water, prices are likely to push even higher through the rest of this year."

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