Dave Dry

Canada-U.S. house price gap widens

Please keep in mind while reading the following article that the Canadian average price is bieng bolstered by historicly high prices in Vancouver and Toronto. As of August 30 2011 the average Edmonton home ( detached, condominium and duplex / townhouse) price is $324,217 that is down 8.5% from a high of $354,718 in July of 2007.  

The following article is taken from the Globe and mail September 29 written by Michael Babad.

Canada-U.S. house price gap widens
The gap between Canadian and American house prices - they're well above pre-recession levels in Canada and still depressed in the United States - continues to grow.

Research by deputy chief economist Douglas Porter of BMO Nesbitt Burns shows a "staggering turnabout" from the 1990s and the first half of the last decade, when American prices were higher.

His research compares U.S. prices measured in Canadian dollar terms, and he notes that the two aren't perfectly comparable because median prices, used for the U.S. are typically lower than average prices, which were used for the Canadian reading.

"While it goes without saying that U.S. and Canadian real estate markets have been in different universes recently (while sharing the same hemisphere), the gap just keeps on going," Mr. Porter said.

"The average home price in Canada is now gliding along at $360,000, more than twice the median existing home price in the U.S. (converted into C$ terms) ... Nothing says prices need equalize, but a gap of more than 2:1 is not sustainable. Three ways it can narrow: a) the C$ falls, b) U.S. prices recover, or c) Canadian prices drop. Or, some of the above, or all of the above."

Yesterday, a fresh reading of the Canadian market, via the Teranet-National Bank house price index, showed house prices climbed 1.3 per cent in July, and are now 12 per cent above their pre-recession peak. As well, Bank of Nova Scotia said in a recent report that Canada's real estate market may be slowing, but it hasn't slumped as have those in some other countries.

 

 If you are considering purchasing property in the U.S. please read my blog post New U.S. property tax rules hit home , and be aware of all the posible risks.