Average home prices in Canada are on the increase largely due to four main cities.
This is due to the data released by teranet-national bank that claims that they are the reason why home prices are not dropping.
The Teranet-National Bank National Composite Home Price Index for June reveals an increase in average home prices, 2.3% increment from the last month. This was largely due to gains in 10 out of the 11 areas it covers.
The average home prices also increased 10% year-over-year, the highest it has recorded since 2010.
The chart revealed by National Bank showed that those gains were attributable to only four cities: Vancouver, Victoria, Toronto and Hamilton.
Without these cities, house prices would have been in the negative territory.
Take Vancouver for example, house prices have soared by 23.4% effectively recording its biggest annual house price increase.
Hamilton recorded a 13.8% hike in prices over the past year, Victoria experienced a 12.5% increase and for Toronto, it was 12.4%.
The price hikes in these cities are the exact opposite of what other cities experienced. In Calgary for example, house prices declined by 2.4%, in Edmonton, it fell by 1.9%, in Quebec city and Halifax the decline were much lower.
Average home prices in Canada went up by 6.8% in 2016, surpassing the historical record of 4% recorded in the first half of the year.
The price increase may not bode well with people trying to get in the market. It might also hurt businesses as price increments can substantially reduce demand.
Hedge fund manager David LePoidevin said the “last move in any bubble is the biggest” to HuffPost Canada.
He added that sale of single-family homes have plummeted in Vancouver even though listings have gone up.
Prices usually take some time to adjust which is completely normal.