Average house price in Canada up 17% in January to $470,297

The average price of a Canadian home sold in January increased by 17 per cent to $470,297 compared to the samemonth a year ago.

Home sales were higher during the month, but prices truly soared, the Canadian Real Estate Association reported Tuesday.

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As has been the case for several years, however, two large and hot markets, in Toronto and Vancouver, skewed the national average higher.

Stripthe two cities out of the numbers andthe average Canadian home was worth$338,392 last month whilethe year-over-year gain drops to eight per cent.

If B.C. and Ontario werestripped out, the picture would lookeven bleaker the average price of a Canadian home would have droppedby 0.3 per cent in January to$286,911.

"While we continue to believe that things just can't any hotter, markets in B.C. and Ontario continue to prove us wrong," TD economist Diana Petramala said, adding that for Toronto and Vancouver, "every month of double-digit home price growth raises the risk of a deeper home price correction down the road."

Despite the eye-popping price gains on a national level, there are signs of tightening in the market locally.

On an annualized basis, prices declined in January in four provinces, including Alberta, Saskatchewan, Nova Scotia and Newfoundland andLabrador.

The average price gain across Canada's26 largest cities was 4.7 per centin January; the strongest was 31 per cent in Vancouver;the weakest was 10 per cent,in Newfoundland andLabrador, which is considered one single market and thus compared to other cities.

Fewer listings

Housing market watchers keep an eye on a number known as inventory, which is a proxy for whether there's enough homes for sale to keep up with demand. It's expressed in terms of months of supply, which means the inventory figure is the amount of time it would take to sell every home on the market at the current pace of sales.

I wanna go back to my little $2.5M shack

9 years ago

Duration 2:14

The latest poster child for Vancouver real estate excess is off the market, having fetched of course more than the asking price

For January, the inventory figure dropped to 5.3 months, its lowest level in more than six years.

"If listings were not in such short supply, January sales activity would likely have reached even greater heights," CREA president Pauline Aungersaid. "Meanwhile, other major urban housing markets have an ample supply of listings, particularly where some homebuyers have become increasingly cautious amid an uncertain job market outlook."

That''s even the case in hot markets, where homes are snapped up in record time.

"Vancouver'smarket is drum tight, with an almost unheard of 91 per centsales-to-new listings ratio," BMO economist Robert Kavcic said. "In other words, almost every new listing is getting absorbed within the month as record sales meet average growth in new listings."