Ontario markets expected to continue to lead home price growth in 2020
Housing markets in Southern Ontario will lead in home price growth this year, and are expected to continue to do so in 2020, according to a new report from ReMax.
ReMax is expecting a leveling out of the highs and lows that characterized the Canadian market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected next year, with the ReMax 2020 Housing Market Outlook Report estimating a 3.7 per-cent increase in the average residential sales price.
Some regions in Ontario continue to experience higher-than-normal year-over-year gains from 2018 to 2019, including London (10.7 per cent), Windsor (11 per cent), Ottawa (11.7 per cent) and Niagara (12.9 per cent).
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” says Christopher Alexander, Executive Vice-President and Regional Director, ReMax of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”
As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by ReMax found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.
Ontario leading the way
Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the GTA are expected to drive the market forward. ReMax is forecasting average sale price growth for 2020 of six per cent, two points higher than the increase from 2018 ($835,422) and 2019 ($880,841 ). While Toronto is experiencing a busy construction season this year, housing supply still falls short of the demands of the city’s rapidly growing population.
Cities such as Ottawa and Windsor are seller’s markets, showing substantial increases in average residential sale price at 11.7 and 11 per cent, respectively. This strong growth is expected to continue into 2020, with Ottawa’s new LRT system impacting surrounding development and Windsor’s continued affordability attracting young professionals to the area. Buyers are also not burdened by the mortgage stress test, as they were in 2018, ReMax says.
The Niagara region is also showing strong growth, with average residential sale price increasing almost 13 per cent, from $378,517 in 2018 to $427,487 in 2019. Value-conscious consumers from the GTA are buying in droves, with many choosing to live in the region and commute to Toronto.
REGIONAL HIGHLIGHTS ACROSS CANADA:
BC
Consumer confidence in regions such as Vancouver West in early 2019 was extremely low and remained relatively shaky throughout the year, resulting in an average residential sale price drop of 7.5 per cent, from $2.27 million in 2018 to $2.10 in 2019. However, consumers have acclimatized to the mortgage stress test, and confidence has begun to return and will prevail in 2020, with prices expected to rise four per cent.
Fraser Valley also experienced a price drop of almost four per cent year-over-year, from $724,740 to $696,502. However, the region is also expected to witness substantial growth, particularly in downtown Surrey, due to the high number of real estate developments catering to businesses and educational institutions. First-time buyers are expected to drive the market in 2020 due to the relative affordability of the region compared to Vancouver proper.
“The drop in sales in some key British Columbia markets represents the last of the ‘down’ market spillover from 2018,” says Elton Ash, regional executive vice-president, ReMax of Western Canada.
“Consumer confidence is poised for a comeback, leading to more healthy and sustainable growth, as more buyers come to terms with the stress test and interest rates are unlikely to increase in any meaningful way in 2020.”
Prairies
Alberta continues to experience slowing economic conditions, leading to a decrease in average residential sale prices in Calgary, from $478,088 in 2018 to $460,532 in 2019. Condos are the easiest way for first-time homebuyers to get into the market, with starter units going for as low as $150,000. While the city’s unemployment rate continues to remain high compared to the rest of Canada, the population is increasing, with more people moving to the city from other parts of the province.
Winnipeg, on the other hand, has shown a small increase in average residential sale price, both for freehold and condominium properties, by 1.5 and 0.8 per cent, respectively. Immigration to the city, in combination with reasonable prices and ample supply, is expected to drive sales going into 2020.
Atlantic Canada
Halifax, NS and Saint John, NB have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single-detached homes. At the same time, the region’s condominium market is being driven by retirees. Conversely, the market in St. John’s, Nfld. is expected to recover in 2020, with increased consumer confidence expected to bring about stabilization. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.
IBS will return to the Las Vegas Convention Center, Jan. 21 to 23, where it will again co-locate with the National Kitchen & Bath Association’s (NKBA) Kitchen & Bath Industry Show (KBIS) for the seventh annual Design & Construction Week (DCW). The two shows are expected to host more than 2,000 exhibiting brands spanning more than one million net sq. ft. of exhibit space, for the largest annual gathering of the residential design and construction industry.
“It’s our goal for the NAHB International Builders’ Show to be the event of the year for our members and industry professionals,” says NAHB Chairman Greg Ugalde, a homebuilder and developer from Torrington, Conn. “Nowhere else will you find top-level education sessions, a variety of networking opportunities, special events and an exhibit hall full of innovative products all in one place. This is truly an event you can’t miss.”
Attendees with a full conference registration will have access to more than 150 education sessions led by renowned experts on a wide range of industry topics. New this year, 
The area also has available land and space to facilitate this growth. The Pickering Innovation Corridor boasts 800 acres of greenfield, prestige employment land, located along a limited access transportation route directly adjacent to the site of the future Pickering Airport.
Pickering is in major transition, with new growth targets set for the city. The new and developing community of Seaton, for example, is preparing to welcome 70,000 new residents and 35,000 new jobs.
Neighbouring Ajax is similarly prosperous, as the town has a well-deserved reputation for progressive thinking. Among the major projects underway is a redevelopment of the downtown, with new public spaces at Pat Bayly Square.
The future of downtown Ajax comprises a focus on "active, livable, innovative, vibrant and eco-focused," according to the Town.
Gary Switzer Chief Executive Officer, MOD Developments[/caption]
[caption id="" align="alignnone" width="350"]
Noorez Lalani President, MOD Developments[/caption]
Artist’s rendering of tower at 55C Residences[/caption]
