I have some data in front of me that compares today’s home prices in 21 global cities to those same cities’ prices before the COVID-19 pandemic. The numbers make clear that Canada’s rapidly rising home prices are no anomaly.
In fact, in three out of four of the world’s leading cities, the pandemic has been a financial boon for residential property owners. Of the 21 global markets we looked at, 17 had significant positive changes in prices. Prices fell in only three.
COVID-19 reordered many markets and stimulated new demand trends as buyers re-evaluated their living situation. But other factors probably contributed even more, including inexpensive financing, increased savings and reduced non-housing spending.
During the pandemic, typical home prices in Montreal have soared by 39 per cent, in Toronto by 30 per cent and in Vancouver by 16 per cent.
Those are impressive numbers and make Montreal the world city with the fastest COVID-19 home price gains. Toronto ranks fourth among the 21 world cities in the report and Vancouver is sixth.
How did cities in other countries compare to the three Canadian cities? During the pandemic, Los Angeles home prices have jumped by 35 per cent. In Auckland, New Zealand, they have rocketed by 32 per cent.
But not every market has seen price growth. The clearest counterexample is Tokyo, where new condo prices tumbled by 7.4 per cent. (The Land Institute of Japan reports that some parts of the Tokyo market have soared, but the overall statistic does not reflect this.)
In 2020, Montreal continued its years-long progression from afterthought to star attraction. A growing awareness of its charms has driven this Cinderella-like transition.
Above all, however, the critical factor is lower prices. Affordability makes Montreal attractive to buyers chased out of Vancouver by taxes and out of both Vancouver and Toronto by Canada’s highest prices.
Even after price gains of 38.9 per cent, the fastest pace among all the world cities we looked at, the median single-family home price in Montreal is just $500,000. That places it fifth from last of our 21 cities when ranked by median price.
The table shows data for the top 10 cities from the report. In each case, the data compares early 2020 pre-COVID prices to the latest available data in 2021.
The Montreal data comes from QPAREB and compares the median price of single-family homes in the metro area in January 2020 to the second quarter of 2021. The Toronto data comes from the Toronto Regional Real Estate Board. It tracks growth in the average selling price for all home types in the Greater Toronto Area between January 2020 and June 2021.
Vancouver price data is from the Greater Vancouver Real Estate Board. It compares the MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver between January 2020 and June of 2021.