Discussion around Canada’s housing situation focused on the largest – and most unhealthy – markets could have a chilling effect on bustling activity in many other centres, warns Coldwell Banker Canada CEO Karim Kennedy.

While the headlines and water cooler talk are often fixated on the state of Canada’s high housing costs, largely weighted to the Toronto, Vancouver and Montreal regions, the head of the Burlington, Ont.-based real estate franchiser said Canadians should recognize there are significant regional differences.

“Although you see a national headline that may suggest one certain market condition, when you peel back the layers, you’re going to find there’s actually quite a bit of differences around the country,” Kennedy said in an interview with RENX Homes.

There is a significant divergence in the health of housing markets across the country.

Year-over-year home prices in the Greater Toronto Area (GTA) and Vancouver markets decreased slightly in Q1, according to Royal LePage's national housing market report for the quarter, while rising 17 per cent in Quebec City, 7.9 per cent in Montreal, and 8.3 per cent in Edmonton.

National news coverage focusing on the largest, struggling markets can create a distorted, broad picture for everyone else, Kennedy said. This could affect buying and selling activity even in different provinces, he continued, as people perceive the major markets slowdown as a national trend.

The good news is that activity may finally be rebounding, however. National home sales rose 3.8 per cent month-over-month in July, driven primarily by the GTA, according to the Canadian Real Estate Association.

A tale of two markets

As the CEO of a global real estate brand operating with 3,000 agents in Canada across 170 offices, Kennedy said his discussions with brokers and agents working around the country reveal large regional variations.

Regina and Saskatoon, for example, are strong markets where properties can receive multiple offers, with some selling over the list price. Quebec and Halifax also remain “healthy” markets, he added.

“For a lot of years, it was Toronto, Vancouver that were really strong, and then people would say, ‘Yeah, but they’re considered too hot,’ ” added Shaun Cathcart, a senior economist at the Canadian Real Estate Association, in a separate interview. 

“If you look at the Lower Mainland (Vancouver region) and GTA together, right now they’re actually the lowest percentage of national sales they’ve ever been. Back in the '80s it was like 35 per cent of the country – today it’s only about 23 (per cent). But it’s still 40 per cent of all the dollars that are flying around out there.”

He agrees that those markets do carry a lot of weight nationally.

“Those markets just swing such a big bat when it comes to those national, provincial numbers, it’s hard to not mention them,” Cathcart said.

RBC’s analysis for transactions in major areas between May and June also reflects this, finding soft activity in southern Ontario and British Columbia while the situation remained more upbeat across in the Prairies, Quebec and Atlantic Canada.

It can be frustrating for realtors to deal with clients entering a transaction shaped by national headlines that have no impact on their local market, or the unique conditions of a particular neighbourhood, Kennedy said. He wants people to understand the variances, because he believes a negative perception could impact other markets.

“What you read for one part of the country is also not necessarily relevant for another part of the country,” he said.

He said agents must be well-informed and willing to educate their clients about the reality on the ground in their own markets.

If a buyer or seller walks into a transaction confused about their market conditions, “now there’s probably a bit more education to be done with the realtor to really understand what’s going on in your local market,” Kennedy said.

Giving consumers, realtors 'more credit’

Cathcart said he's not as concerned, however, about the potential for the negative mood in some major markets affecting other areas. He believes people wanting to enter the buy and sell market will be well attuned to their regional conditions. If not, their local realtors can fill them in.

Prospective buyers tend to concentrate their home search by specific markets and neighbourhoods, he said. If a realtor in Charlottetown is hearing questions from their client about how the Vancouver market impacts them, Cathcart suspects the realtor would swiftly allay such concerns.

A buyer or seller preparing to make the biggest financial decision of their life accompanied by a realtor is not going to make it “based off of a one-minute clip that you see on the national news that just talks about: Toronto’s bad so therefore I shouldn’t buy a house in Saskatoon,” he said.

"I give consumers and their realtors a lot more credit.”