Housing Prices Up, More Hikes Expected
photo by Becka Spence
Housing prices increased in Canada on average by 10.3% in Q1, compared to the same period year ago, showed Price Survey from Royal LePage. 40 markets around the country experienced double digit growths, with Toronto adding 9% to the price level for standard two-storey homes.
Professionals believe that introduction of HST in July in Ontario and British Columbia plays some role in the increase (Vancouver recorded staggering 19% increase). While HST does not directly affect resale market (it applies only to new homes), it may turn the potential buyers from new housing market to resale market, thus fueling the competition.
HST also fuels current new housing prices and construction (there was 75% increase in housing starts since the April 2009 bottom), because buyers are trying to avoid the HST. This pressure is believed to fade away soon after HST introduction.