Every Canadian knows that the real estate prices in Canada have increased very quickly.
But do you know how fast? To get a clearer picture of how fast home prices have gone up in Canada, we have to compare it with the US home prices. Going back to the Great Recession, data have shown that while US real estate prices plunged during those times, Canadian home prices maintained its accelerated increase. In fact, Canada even filled the market with policies that are designed to increase the amount of debt a household can get. As a result, Canadian home prices experienced a leap that is (a whopping) 29 times faster than the US home prices growth. A staggering 88% increase in Canadian home prices since 2005, meant prices were almost double after 15 years coming into 2020. Contrast that with the US home prices which increased at only 2.9% over the same period, thus you get the increase in Canadian home prices that is 29 times faster than the US.
This accelerated increase in Canadian real estate prices is still happening even during this slow down of the global economy due to the pandemic. Prices of real estate in Q1 2020 have gone up at 2.4% from the previous quarter. And comparing it to last year, prices have gone up at 3.4% (after adjusted for inflation). The US home prices in the meantime had a much slower rise in the same quarter, although it still saw about the same growth. In Q1 2020, US home prices grew 0.5% from the previous quarter, and 3.3% increase when compared to last year, which is the slowest annual growth rate for US real estate prices since 2013. This goes to show that the growth in Canadian home prices is accelerating, while the US is losing speed.
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