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Canadian Real Estate Prices Make Biggest Jump In The G7, During The Pandemic

Wed Oct 14, 2020 6:52 pm

OCTOBER 13, 2020
Canadian real estate prices made one of the largest leaps on news of a pandemic-driven economic shut down. US Federal Reserve Bank of Dallas data shows most G7 countries saw prices rise in real terms during Q2. Canada however, saw real home prices launch at the fastest pace of any of the advanced economies. This comes despite a deterioration in the indicators traditionally attributed to price growth, such as employment and immigration.

Canadian Real Estate Prices See Biggest Jump In Q2
Canadian real estate prices increased at the fastest rate of any G7 country in the second quarter. Canadian real home prices climbed 2.42% in Q2 2020, when compared to the previous quarter. France is a distant second in the Group, with prices rising 1.71% over the same period. Germany is the third fastest, at 1.14% in the quarter – less than half the increase in Canada. Pandemic stimulus helped drive Canadian real estate prices to a new record high. With almost no immigration, and soaring vacancy rates.

On the bottom half of pandemic gains are the US, Japan, and the UK. The US increased 0.98 in Q2, when compared to the previous quarter. Japan and the UK made declines, with prices falling 0.86% and 0.90% respectively.

Canadian Real Estate Prices See Second Fastest Annual Growth
In terms of real annual gains, Canada is a close second behind France. France saw real home prices rise 5.42% in Q2 2020, when compared to the same quarter a year before. Canada follows with an increase of 5.39%, just 2 bps below France. Germany is in third with a 5.18% increase, compared to last year. It should be noted while all three of these markets are seeing similar price increases, both France and Germany have not seen such large gains persistently over the past few years.

The US, UK, and Japan all had less impressive home price gains over the past year, when adjusted for inflation. The US saw prices increase 3.37% in Q2 2020, when compared to the same quarter last year. The UK follows an increase of 0.36%, a tenth of what the US is seeing. Japan is seeing the worst performance in the G7, down 1.30% from last year.

G7 Real Estate Price Index
An inflation adjusted index of G7 real estate prices.
Source: US Federal Reserve Bank of Dallas, Better Dwelling.
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