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House prices spike 25.7% in Vancouver

Executives or down-sizers looking to relocate to relocate their families in Canada would do well to avoid Vancouver and think Windsor.

The price of an average four-bedroom, two-bathroom home in Vancouver is $1.5 million, compared with only $144,456 in recession hit Windsor, a difference of more than $1.3 million according to realty company Coldwell Banker in a report released Wednesday.

Vancouver ranked as the third most expensive place in North America to buy a four-bedroom home, behind only California?s Newport Beach at $2.5 million and Pacific Palisades at $1.6 million.

The last year has seen an astounding 25.7 per cent increase in home appreciation in Vancouver, according to figures also released Wednesday by the Canadian Real Estate Association.

The headline figure has elicited yet more warnings from economists that the west coast city is in unsustainable a price bubble.

"Quite simply, no other city in the country is seeing anything remotely close to what?s unfolding in Vancouver,? said Bank of Montreal deputy chief economist Doug Porter.

Windsor on the other hand, has seen major unemployment from the crash in the auto industry, as it now tries to promote itself as a retirement community.

"There is a huge difference when you look across North America to see what your money can buy for the same kind of property,? said Jim Gillespie, CEO of New Jersey based Coldwell Banker in an interview. "In this case it would make sense to sell that home in Vancouver if you?re thinking of retiring in Windsor.?

The annual report looks at homes that are most sought after by executives as they relocate to another city. It is also looked at by human resource consultants to determine proper compensation and living allowances for their staff.

Canadian prices, thanks to a healthy Loonie have also been creeping up compared to U.S. cities where real estate as an asset class has been struggling.

"Canada has a banking system that is the envy of the world and its economy is much healthier and that is reflected in the pricing,? said Gillespie.

Canadian existing home sales were up by 2.7 per cent in May from year ago levels according to CREA. Average prices were also up by 8.6 per cent to $376,817. However, if Vancouver sales were excluded the increase would only be 5.6 per cent. If Toronto and Vancouver were excluded the gains would only be 3.7 per cent.

Toronto meanwhile, seems surprisingly reasonable based on the Coldwell Banker figures.

An average executive four bedroom home in the city is only $378,913, making it cheaper to relocate here than in Guelph, Burlington, Ottawa or even Wasaga Beach.

Those figures are at odds with other studies however. The cheapest average four bedroom home in the city of Toronto in the first quarter of 2011 according to Royal LePage is $465,000 in central Scarborough.

From there it gets progressively more expensive. A four bedroom home in Leaside would cost $1.12 million and in Moore Park it would cost $1.7 million.

Some of the difference in pricing could be attributed to methodology. Royal LePage says their average executive home must be detached and have a two-car garage. The Coldwell Banker report doesn?t have the same stipulation and includes other housing stock such as town homes.

In May, Toronto average prices jumped 8.7 per cent, or slightly higher than the national average.

"Among other large cities, only Toronto is showing anything close to overheating,? warned BMO?s Porter. Although the city?s price gains "seems to fall well short of bubble territory.?

If you?re hoping to avoid overheated markets, some of the more affordable places to relocate according to Coldwell Banker are in the Golden Horseshoe area. Welland, Fort Erie, St. Catherines, London and Brantford are all within the top eight cheapest places in Canada to buy a home.

Ontario also has some of the largest disparities in pricing with a $480,000 difference between Windsor and Oakville at $624,914.

While Niagara Falls, Ontario, at $272,769 remains affordable, just crossing the bridge results in a dramatic price drop.

"Executive? homes in Niagara Falls New York are just about the cheapest in the U.S. at $61,000.

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