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Posthaste: Homeowners in these parts of Canada have built hundreds of thousands in equity in 5 years Back to video

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Rising home prices have sent property values soaring over the past five years, and for some lucky buyers who snapped up homes in 2018, that’s amounted to hundreds of thousands of dollars in extra equity.

Homeowners in 15 major housing markets across Canada who bought properties in July 2018 have all on average seen their equity grow over the past five years, according to a new study by Zoocasa. The brokerage compared the Canadian Real Estate Association’s benchmark prices in July 2018 to July of this year to reach its findings.

Ontario homebuyers experienced the greatest increase in property values by far, the report said. Topping the list of beneficiaries are homeowners in the Greater Toronto Area, where a house with an average benchmark price of $759,000 in July 2018 is now worth $1,161,200 — or $401,700 more.

Property values in smaller cities also made significant gains, thanks to pandemic lockdowns that sent buyers on a search for more space at more affordable prices. For example, the value of a house in the Hamilton-Burlington region has risen $314,400 since July 2018, with the benchmark price hitting $873,600 in 2023 compared to $559,200 in 2018.

Similarly, the Kitchener-Waterloo area made major gains and equity in the average house has grown $309,200 since 2018. Home values in London and St. Thomas grew $272,000 since 2018 and Ottawa homeowners saw their equity climb by $248,100, Zoocasa said.

British Columbia homeowners in Victoria and the Greater Vancouver Area have also benefited from rising prices. In Victoria, the price of a home has risen $248,400 since July 2018, with the average price climbing to $887,900 from $639,500. Vancouver, home to the most expensive real estate in the country, experienced a $197,600 gain as prices jumped to $1,210,700 in July this year from $1,013,100 in 2018.

Home values in Montreal, Calgary and Saint John, New Brunswick, also clocked in higher over the last five years, with gains above $100,000 that created $189,500, $121,700 and $116,300, respectively, in additional equity.

Of course, your mileage may vary, and the exact amount of equity an owner has built depends on mortgage payments, home equity lines of credit and other loans.

Not all markets experienced triple digit gains in home values, either. The benchmark price in Quebec City came in just shy of the $100,000 mark, rising $90,400 since 2018. Winnipeg and Saskatoon also experienced modest increases, with values up $70,700 and $65,300, respectively. The return on investment was less great for homeowners in Regina, who ended up with an additional $26,200 in equity after five years, and even worse for those in Edmonton, who saw values increase by only $19,800.

Breaking down property value changes by housing type reveals even more interesting findings. For instance, 2018 buyers of townhouses in Kitchener-Waterloo can boast that they’ve built more equity over the past five years than their counterparts in any other part of the country, including expensive Toronto and Vancouver. Townhome prices in the Kitchener region have almost doubled in the past five years, climbing $307,000 from the July benchmark price of $338,000.

Still, in some parts of the country, condo and townhome owners ended up losing money. Condo owners in Edmonton who bought in 2018 have watched values of their residences drop by around 13 per cent. A condo bought there in July 2018 at $207,900 is now worth $180,600 — a decline of $27,300. Meanwhile, townhome owners in Regina have seen values fall by $600, Zoocasa said.

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The average price of a Toronto home rose slightly in August from the previous year, but remained flat from July, suggesting the housing market is cooling.

The Toronto Regional Real Estate Board said on Sept. 6 said there were 5,294 sales in August, up almost one per cent from July. But on a year-over-year basis, sales were down 5.2 per cent.

The average home price of $1,082,496 was three per cent lower in July, but up 0.3 per cent from August 2022.

Higher borrowing costs arising from high interest rates, combined with uncertainty over whether rates will keep going up, are adding volatility to the housing market, TRREB said.

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Mortgage rates are at their highest level since 2008, putting pressure on those with variable-rate loans or mortgages coming up for renewal. Wealth adviser Ted Rechtshaffen gives us some advice on what our next step should be. Spoiler alert: you should still consider a variable rate.

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Today’s Posthaste was written by Victoria Wells (@vwells80), with additional reporting from Financial Post staff, The Canadian Press, Thomson Reuters and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.