It would appear likely that there is an error in the data that Statscan is using.

Yes, that stat is definitely wrong.

I have attached a graph showing the average sales prices between 1967 and 2008. It seems to me that the average price of a home in Greater Victoria has risen from $248,921 to $583,701 which is 234% of that original value – wow!

“Norm, what areas were being developed around that time?”

Silverspring (late) and Arbor Creek (early).

Jen,

As Bookrat stated, this index is only for new house prices, and I presume based on the notation towards the top of the first column (1997=100) that the base value is 100. The Victoria and Vancouver number seem completely odd to me. The average price of a detached house in Vancouver was slightly below $400K in 1997. It’s somewhere just below $900K today.

So I suppose if we’re looking at Stonebridge vs. whatever was being built in 1997, it makes sense that people are paying more… Norm, what areas were being developed around that time?

What seems even weirder, Norm, is that average new build in Vancouver could have declined by 7.8% from August 2008 to August 2009, which is more than half of the total percentage of change we’ve seen since 1997 by this chart. Victoria’s stats just look impossible- a new home is now 3.5% less than 1997? If true and I had bought a new home in Victoria in 1997, I would be significantly cheesed. I was looking through the data sources and methods for the information thinking I had to be misinterpreting what the base value was, but didn’t find anything. Here it is- hopefully someone smarter and/or more alert than me can figure it out : http://bit.ly/3TX4Kk

Could it be that this data is pertaining to only new homes (vs. resales)? The fact that builders knew they could charge a premium during the “boom times” (and may have in fact had higher construction costs), combined with the fact that builders have more recently offered significant incentives to sell? I’m not sure that would account for this much of a rate of change either- just guessing here.

On another note, this S-P ran this yesterday:

Provincial economy takes hit from strong dollar: http://bit.ly/14XmzZ

“The rising Canadian dollar and continued uncertainty around potash are further pieces to the puzzle of the province’s finances as the government prepares to announce spending cuts Friday and begins deliberations on next year’s budget. With the government dealing with cratering potash revenue, Saskatchewan Party Finance Minister Rod Gantefoer is casting a baleful eye towards the soaring loonie as it approaches parity with the U.S. dollar.”

http://www.globalpropertyguide.com/

Is it possible that the price of a new home in Vancouver is only 14.5% higher than it was in 1997? That’s how I’m ready this but it sounds messed up to me.

Granted, some of that is definitely due to the fact that a similar absolute rise (say, $100k) across the country leads to wildly differing percentages … but the fact is that housing has become more than twice as expensive in this province in the last 12 years — 2.5x as expensive in Regina. I know for a fact that my salary has not increased by 112% in 12 years… so therefore, my standard of living has de facto gone down compared to 1997-me.

Seems to me that some release of steam is warranted, particularly in markets like Toronto and Vancouver where most, if not all of the affordability gains made through the recent correction have been lost.

Mortgage rate hike could cool housing rebound
http://bit.ly/3zKaxz

“By raising their mortgage rates and making it more expensive for customers to borrow money for a home, the banks are effectively throwing some cold water on residential real estate. That, in turn, might allow the Bank of Canada to keep its short-term rate unchanged as pledged.”

It’ll be interesting to see where this goes in the next few months.