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Forecast 2019 – where are Canada’s hottest housing markets?

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Forecast 2019 – where are Canada’s hottest housing markets?

2019 web

Wondering where Canada’s hottest housing markets are, as 2018 comes to a close and 2019 is just around the corner? Well, that all depends on who you ask.

Two of Canada’s large realty firms – Royal LePage and ReMax – both issued their 2019 housing market outlooks on Dec. 11.

Yes, the very same day.

Rather than produce two stories on the exact same topic, just from different sources, we thought it would be interesting to compare them. And while there are some commonalities in their forecasts, there are also some interesting discrepancies.

There is no ‘Canadian’ market

Let’s begin with the headline of ReMax’s 2019 Housing Market Outlook: “Canadian home prices expected to increase by 1.7 per cent in 2019.”

Yeah, about that. Forget that headline. As we recently wrote, those national numbers are pretty meaningless. It’s like trying to summarize the weather, temperature or traffic as “Canadian.”

But, just for comparison purposes, ReMax estimates Canadian home prices will grow 1.7 per cent in 2019; Royal LePage, 1.2 per cent.

National numbers that do matter are interest rates, GDP growth and employment. Then there’s immigration, which affects some markets more than others, mortgage regulations and housing supply. All of these factors are the key drivers of real estate. But more on that later.

Now let’s take a look at some of the regional highlights.

GTA

ReMax says:

  • Toronto average prices down 4% in 2018 to $789,181
  • Toronto average prices forecast to rise 2% in 2019 to $804,964

In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity in 2018, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter this market. Resale condos, on the other hand, now represent almost 37 per cent of total sales, fueled by affordability.

ReMax Housing Market Outlook, select major markets

Region 2018

 Average Home Price

 

2019

Average Home Price

(Forecast)

Year-over-Year

(%)

Vancouver $1.05M $1.01M -3.0%
Edmonton $379,539 $360,562 -5.0%
Calgary $487,399 $487,399 0.0%
Saskatoon $333,187 $343,182 0.6%
Regina $322,500 $322,500 0.0%
Winnipeg $323,001 $335,921 4.0%
Windsor $299,750 $329,725 10.0%
London $379,654 $398,636 5.0%
Kitchener-Waterloo $473,275 $487,473 3.0%
Hamilton-Burlington $707,949 $849,538 2.0%
Barrie $477,839 $492,174 3.0%
Oakville $1.08M $1.13M 5.0%
Mississauga $705,406 $733,622 4.0%
Brampton $577,846 $600,959 4.0%
Durham $594,585 $612,422 3.0%
Toronto $789,181 $804,964 2.0%
Ottawa $678,670 $705,816 4.0%
Halifax $299,982 $308,981 3.0%
St. John’s $265,523 $265,523 0.0%

 

Elsewhere in Ontario

Rising interest rates and the stress test continue to make it difficult for prospective buyers in Barrie, Oakville and Durham regions.

“This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

Hottest in the province

The hottest market in Ontario? Windsor, which showed price growth of 13 per cent in 2018, to $299,750, with another 10 per cent increase forecast for 2019. London is also expected to be strong, with prices to increase another five per cent next year, after rising 17 per cent this year to reach $379,654.

 

Royal LePage says:

  • GTA average price in 2018 $844,000
  • GTA average price forecast to rise 1.3% to $854,552

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” says Chris Slightham, broker and owner, Royal LePage Signature Realty.

Many regions outside of Toronto’s core saw price declines in 2018, a result of overshooting in previous years. The continued population growth should cause the suburbs to stabilize and reignite price growth. In addition, the potential subway expansion into the suburbs should stabilize and increase home prices in close proximity to new transit infrastructure.

Elsewhere in Ontario

The median price in Ottawa is expected to increase 2.5 per cent in 2019 to $487,910, benefitting from the city’s healthy economy and high income per household, driven by the public and technology sectors.

Interestingly, Royal LePage also notes that neither the new mortgage rules nor recent interest rate hikes have notably affected Ottawa’s housing market.

 

Highlights from other Canadian markets

The star performer of all major Canadian markets in 2019? Montreal, according to Royal LePage.

“Quebec will out-perform the nation in 2019,” says President and CEO Phil Soper. “Like other regions of the country, the economy is strong and people are working. What is different is affordability. We have to remember that Montreal sat out the rapid home price inflation we saw in Vancouver and Toronto this decade, and in Calgary the decade before.”

As for the ReMax outlook for Montreal, Quebec did not participate in this year’s forecast.

 

 

Royal LePage Market Survey Forecast

Region  

2018 Aggregate Home Price
(Year End Estimate)


2019 
Aggregate
Home Price 
(Forecast)
Year-over-Year (%)
Canada $631,000 $638,257 1.2%
Greater Toronto Area $844,000 $854,552 1.3%
Greater Montreal Area $409,000 $421,306 3.0%
Greater Vancouver $1.28M $1.29M 0.6%
Ottawa $476,000 $487,910 2.5%
Calgary $484,000 $473,104 -2.3%
Edmonton $386,000 $378,691 -1.9%
Winnipeg $306,000 $309,829 1.3%
Halifax $321,000 $326,096 1.6%
Regina $327,000 $311,505 -4.7%

 

Influential factors

Now for more on those national factors that do influence real estate.

“I would call attention to two factors influencing our forecast that deserve special consideration,” says Soper. “Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth.

“The future for Canadian housing remains bright, perhaps too bright. With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages. More than an affordable housing problem, we will once again be facing an overall housing supply crisis.”

As for interest rates, the Bank of Canada held its benchmark interest rate of 1.75 per cent on Dec. 5, citing a weaker than expected energy sector. Further rate increases are expected in 2019, making it more difficult for Canadians to buy a home in 2019.

The Bank forecasts GDP will increase 2.1 per cent in 2019, a modest increase over 2018, while Canada’s unemployment rate fell to 5.6 per cent in November, the lowest on record since 1976.

RELATED READING

5 things we can learn from real estate in 2018

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

Delays in approval process contributing to housing affordability issue in GTA

What the GM plant closure means for Oshawa economy and housing market

 

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Oshawa housing to move into buyers’ market thanks to GM closure

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Oshawa housing to move into buyers’ market thanks to GM closure

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In one fell swoop, General Motors Canada’s announcement on Nov. 25 that it plans to close all assembly operations in Oshawa, Ont. effectively has pushed housing there into a buyers’ market.

“The announced General Motors plant closure will certainly impact Oshawa, and the trickle-down effect will be felt across the province,” Christopher Alexander, executive vice-president and regional director, ReMax Integra of Ontario-Atlantic Region, told Homes Publishing.

“However, it’s important to remember that GM isn’t the economic driver that it used to be in Durham Region. The area boasts a growing education sector and a new casino is slated to open in 2019, which will boost new condo development and housing demand. With the rise of remote work and no relief expected for Toronto house prices in 2019, Oshawa will continue to be a popular choice with first-time and move-up buyers who have been priced out of the 416.”

There you have it, prospective home buyers.

Opportunity knocks

While such a major employment hit is hardly an occasion to celebrate, these developments could mean opportunity for those looking to buy a home.

“The fact is that more than 2,500 GM workers will be left in the lurch come 2020, and the looming loss of income will likely prompt a softening of the market at a local level, as existing residents and prospective homebuyers digest the news and what it might mean for them,” says Alexander. “This coming closure, coupled with further interest rate increases in 2019, is likely to trigger a market shift from the current balanced territory, as homebuyers delay purchases, scale down lower-priced properties or move away in search of employment.”

Also read: What the GM plant closure means for Oshawa economy and housing

Also read: Focus on Whitby and Oshawa

Also read: 5 affordable neighbourhoods for detached homes in 416 and 905

Another real estate expert, Don R. Campbell, says the impact of the closure could take 18 to 24 months to play out fully in the region.

Diversified economy

Thankfully, there is more going for Oshawa and the Durham Region than just General Motors. Though it was once described as the “Automotive Capital of Canada,” in recent years the economy has diversified into education and health sciences. The University of Ontario Institute of Technology, Durham College and Trent University Durham and all have campuses in the city, among other economy-boosting facilities.

Indeed, in its latest Metropolitan Outlook, the Conference Board of Canada pegged Oshawa to be one of the strongest economies in the province for 2018. The Board forecast real GDP growth of 2.6 per cent this year, following 3.2 per cent in the last two years, citing strength in the non-residential construction, education, health care, finance and insurance sectors.

In addition, Statistics Canada figures show that Oshawa was one of the fastest growing cities in Ontario from 2011 to 2016, with 6.6 per cent population growth, second only to Guelph at 7.7 per cent. This, after growing 7.7 per cent from 2006 to 2011.

Importantly, for prospective home buyers, transportation improvements such as expanded GO Transit and the Hwy. 407 extension make it easier for people to live in Oshawa – at cheaper home prices – and commute to work in other areas such as Toronto. Another extension of the 407 eastward to neighbouring Clarington is due for 2020, further easing transportation options.

New home opportunities

Tomorrow, we’ll explore some of the opportunities to buy new homes in the Durham Region.

 

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Condo TO web

GTA condo sales and prices hit record levels

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GTA condo sales and prices hit record levels

Condo TO web

With home prices seemingly forever on the rise, there is only one way for many GTA homebuyers to go – up, as in into highrise condos and other multi-family housing options.

Fueled largely by affordability – and the lack thereof in lowrise homes – resale condominium apartments and townhomes in the GTA now represents almost 37 per cent of total residential sales by the Toronto Real Estate Board (TREB), up from 30 per cent in 2013, according to a new report by ReMax of Ontario-Atlantic Canada Region.

ReMax report

Momentum has also been reflected in resale condominium values, which is the only property segment that held up against the 2017 market correction, ReMax says.

The average price of a condominium unit increased almost eight per cent to $551,761 between January and October 2018, up from $512,552 during the same period in 2017.

Townhomes were slightly ahead of last year’s pace, with values hovering at $571,058, compared to $568,165 in 2017. Prices of freehold properties, including single-detached, semi-detached, attached/row/townhouse and linked townhomes are all down year-over-year.

AFFORDABILITY KEY ATTRACTION

“The condominium lifestyle continues to resonate with buyers in the Greater Toronto Area for a number of reasons,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada Region. “While the affordability aspect is first and foremost, we’ve also a seen strong investor presence in recent years.”

Alexander cites a recent report by Urbanation and CIBC, which found that investors who bought condominiums for the purpose of renting accounted for 48 per cent of all newly completed units in the GTA in 2017. “The income potential, given today’s tight rental market, in addition to the overall return on investment, has been a serious draw for real estate investors.”

Immigration, population growth and lifestyle choices have also contributed to the uptick in demand for condo apartments and townhomes. Aging infrastructure, combined with a lack of transportation alternatives, longer commute times and the environmental component – with efforts to reduce carbon footprint – have all played a role in buyers choosing condominiums in Toronto proper that are close to both work and play, Alexander says.

DOWNTOWN THE CHOICE LOCATION

The most popular area for condominium sales remains the downtown core, with one in every five condominiums (21.9 per cent) sold in the area bordered by Bloor Street to the north, the lakeshore to the south, the Don Valley Parkway to the east and just past Dovercourt Road in the west.

“In spite of a proliferation of condominium developments over the past decade, supply and demand issues continue to persist in the core,” says Alexander. “Limited inventory continues to place substantial upward pressure on prices, with fewer affordable housing options available– and that includes condominium rentals.”

Average resale prices hover at $700,000 for condo units, with new construction closing in on $1,000 per sq. ft.

PROXIMITY TO TRANSIT

“Higher prices in the core are prompting buyers to consider condominium communities farther afield,” says Alexander. “New construction along subway lines to the north, east and west are exceptionally popular, especially with first-time buyers. Yonge Street north of Hwy. 401 comes to mind, as well as the Sheppard line between Bayview Avenue and Leslie Street. Combined, these two areas represent approximately 10 per cent of total resale condominium sales to date and continue to experience growth.”

Mississauga is the GTA’s second most popular destination for condominium living, accounting for 14 per cent of condominium sales so far this year.

Almost 51 per cent of condominium sales in the GTA occur under the $500,000 price point, but affordability is being threatened as builders and developers face skyrocketing construction costs and a land crunch within the GTA, and struggle to maintain the status quo, ReMax says.

“The necessity to ‘build up’ has never been more prevalent in a city that has seen its population climb from one census to the next,” says Alexander. “To prevent the run-up we’ve seen in housing values in the past, all levels of government must work together with developers to streamline the building process. We need to create more affordable GTA housing options that can accommodate buyers and renters at every price point.”

THE TOWNHOME OPTION

These trends generally align with the findings of another report, from Altus Group. Lack of affordability and availability of single-family new homes has buyers increasingly looking to townhomes as a lowrise home option. But supply issues in this category have seen new townhouse sales plummet in the past two years, in both absolute terms and as a percentage of total new home sales – just seven per cent of the total in the first half of 2018.

RELATED READING

New condos in Toronto hit record high in prices

Vast majority of GTA Millennials fear buying a home is out of reach, poll says

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

5 steps to solving the housing affordability issue in Ontario

 

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Detached homes

5 affordable neighbourhoods for detached homes in 416 and 905

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5 affordable neighbourhoods for detached homes in 416 and 905

Detached homes

by Wayne Karl

Looking for a detached home in the GTA and not sure where to look? Despite what recent reports would have you believe,  there are still some affordable neighbourhoods for single-family homes in the 416 and 905 areas.

Affordable being a relative word, of course, as compared to average prices. As of Sept. 30, 2018, the average price of a detached home in the GTA is $1.01 million – $1.34 million in the 416, and $905,722 in the 905.

Indeed, there’s been no shortage of stories recently about the challenges of the housing market – namely supply, pricing and affordability – on both the resale and new homes sides of the market.

The most recent, in fact, coming this morning.

“While higher borrowing costs and tougher mortgage qualification rules have kept sales levels off the record pace set in 2016, many households remain positive about home ownership as a quality long-term investment,” Toronto Real Estate Board President Garry Bhaura said Oct. 3 in releasing TREB’s Market Watch Report for September. “As the GTA population continues to grow, the real challenge in the housing market will be supply rather than demand. The Toronto Real Estate Board is especially concerned with issues affecting housing supply as we move towards municipal elections across the region.”

For the purposes of this story, let’s focus on resale homes. (We’ll prepare a follow-up focusing on new detached homes in a subsequent report in the coming days.

First, let’s look at some of the hottest areas of the GTA in terms of price growth.

Top five GTA neighbourhoods for price appreciation

Detached homes in 2018
NEIGHBOURHOOD Q1 Q2 % Change
Palmerston-Little Italy,
Trinity-Bellwoods $1.60M $1.87M 17
Brock $498,966 $573,951 15
The Beaches $1.32M $1.50M 13
Edenbridge, Humber Valley, Islington $1.43M $1.57M 10
Georgina $538,817 $590,255 10
Source: ReMax Integra Ontario-Atlantic Region, TREB

 

Double-digit price growth in one quarter is fantastic if you currently own in any of these areas. But if you were hoping to buy there, your purchase price just got a lot more expensive in a matter of months.

Now, let’s take a look at some of the comparatively more affordable areas for detached homes in the GTA.

 

MOST AFFORDABLE NEIGHBOURHOODS IN THE 416

Detached homes, Q2 2018
NEIGHBOURHOOD Average Price
West Humber, Claireville, Rexdale-Kipling,
and Thistletown-Beaumond Heights $732,854
Bendale, Woburn and Morningside $742,670
Malvern, Rouge $752,292
Rockcliffe-Smythe, Keelesdale-Eglinton West, Weston $783,141
Downsview-Roding, Glenfield-Jane Heights, Black Creek $859,215
Source:  ReMax Integra Ontario-Atlantic Region, TREB

 

MOST AFFORDABLE NEIGHBOURHOODS IN THE 905

Detached homes, Q2 2018
NEIGHBOURHOOD Average Price
Essa $547,970
Oshawa $556,309
Brock $573,951
Clarington $585,562
Georgina $590,255
Source: ReMax Integra Ontario-Atlantic Region, TREB

 

As you can see, some of the still-affordable areas for detached homes in the GTA – such as Brock (Durham Region) and Georgina – are also performing well in terms of price growth.

Durham Region, Simcoe County and Dufferin County, in short, are hot.

In particular, Brock  and Essa (Simcoe County), Burlington, Halton Hills, Brampton, Orangeville and Scugog are all showing promise in detached home price growth, according to ReMax Integra, Ontario-Atlantic Canada Region.

“After an extended period of housing market inertia, the floodgates are breaking open,” says Christopher Alexander, executive vice-president and regional director, ReMax Integra. “Upward movement in detached housing values and the threat of additional interest rate hikes in the future are prompting homebuyers to get off the fence and into the market. Rising consumer confidence, job security and an economy firing on all cylinders should continue to support healthy home-buying activity in the GTA for the remainder of the year and into 2019.”

Next in this series, we’ll explore some of the new home developments and buying opportunities in some of these areas, as well as those for multi-family homes and condos.

Wayne Karl is Senior Digital Editor at Homes Publishing. wayne.karl@homesmag.com

RELATED STORIES

Vast majority of GTA Millennials fear buying a home is out of reach, poll says

GTA housing market correction coming to an end, ReMax says

GTA new home market quiet in August

 

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GTA housing market correction coming to an end, ReMax says

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GTA housing market correction coming to an end, ReMax says

Toronto fall cityscape Web

by Wayne Karl

Get ready for a busy GTA housing market this fall and into 2019, as the recent correction is coming to an end – especially for single-detached homes – according to a new report from ReMax Integra, Ontario-Atlantic Canada Region.

Following a strong summer market, demand for detached homes is on the upswing, as active listings fall and average prices begin to rebound, the realty firm says.

The supply of detached homes listed for sale has gradually declined, after peaking in May, according to the Toronto Real Estate Board. Average price in the nine TREB markets has been battling back from trough levels that were reached as early as July of 2017 in Durham Region to as recently as February of 2018 in the Central Core.

GAINING MOMENTUM

“We expect momentum to build moving into the traditional fall market, and the trend to continue throughout the remainder of the year,” says Christopher Alexander, executive vice-president and regional director, ReMax Integra, Ontario-Atlantic Canada Region. “The worst is now behind us. Pent-up demand will be a factor in the coming months, as homebuyers – many of whom delayed their purchasing plans – are entering the market.”

Despite some softening in sales activity, condo prices have continued to climb throughout 2018, with the year-to-date average price (January to August) now $548,103, seven per cent ahead of 2017 levels. During the same period, average price for a detached home in the GTA has come down 11 per cent to $1.01 million. The differential – $623,288 versus $464,729 – has many buyers thinking that if they stretch their budget, they can buy a detached home, Alexander says. Condo townhouse values were on par with year ago levels ($569,103 versus $571,463), while semi-detached homes were down just three per cent year-over-year.

First-time buyers of single-detached homes in the $600,000 to $900,000 range are leading the charge, ReMax says. Since June, this segment has reported a 22-per-cent increase in year-over-year sales. Inventory at this price point in the 416 area is low, potentially prompting buyers to expand their search into the 905, where supply and price options are more plentiful.

The luxury market is also beginning to firm up, with a 16-per-cent increase in sales of single-detached homes priced at more than $2 million in July and August, compared to the same period in 2017.

416_monthly_avg_price

“It’s been a real roller coaster for single-detached properties in the GTA over the past 32-month period,” says Alexander. After reaching peak levels in early 2017, market-cooling tactics such as Ontario’s Fair Housing Plan in April, the federal government’s mortgage stress test expansion in October of 2017, and the Bank of Canada’s interest rate hike in January of 2018 created a great deal of uncertainty in the market.

Many financial experts, however, expect another interest rate hike, possibly as early as the next Bank of Canada announcement on Oct. 24, or the following one on Dec. 5.

“There’s no question that the threat of higher interest rates has propelled more buyers into the GTA housing market in recent months,” Alexander told Homes Magazine. “We suspect that small, incremental hikes will be absorbed, especially in the short-term, as buyers take advantage of detached housing values that are off peak levels.

“While the October 2016 stress test for high-ratio mortgages had little impact on the market, the same can’t be said for subsequent interventions,” says Alexander. “Conditions had changed. Inventory levels reached their lowest point in October 2016, which contributed to a notable uptick in sales and pricing between October and May 2017. The introduction of the Fair Housing Plan set the wheels of correction in motion.”

The run-up in detached housing values between January 2016 and peak levels in early 2017 was unprecedented. The highest appreciation was noted in the city’s west end, where the average price had climbed 60 per cent in the 14-month period, rising from $763,327 at the start of 2016 to $1.22 million in March of 2017.

DURHAM, SIMCOE & DUFFERIN COUNTIES

Durham Region, Simcoe County and Dufferin County also experienced serious gains in just over a year, with prices climbing 55 per cent, 52 per cent and 59 per cent, respectively. The average price of a detached home in the central core, home to the most expensive properties in the GTA, rose 48 per cent, jumping from $1.68 million in January 2016 to $2.5 million in February 2017. Peel Region, the city’s east end, York and Halton Regions all reported increases ranging from 38 to 47 per cent over the one-year period.

“The pace was simply unsustainable,” says Alexander. “While government intervention appeared heavy-handed at the time, in retrospect, the measures put in place served to cool down a wildly overheated market.”

Since then, buyers have cautiously re-entered the market, with many taking advantage of lower, post-correction detached property values. By the end of August 2018, homes in the more-affordable West and East Districts were back on the rise and within striking range of those average prices reported during the same period in 2017. Detached housing values in the city centre – the target of investors throughout 2016 and early 2017 – have been climbing, albeit at a more moderate pace, particularly north of Hwy. 401.

905_month_ave_price

In the 905 areas, recovery is moving at a slower pace, but as inventory levels decline, detached housing values are expected to appreciate. In particular, Brock (Durham Region) and Essa (Simcoe County). Burlington, Halton Hills, Brampton, Orangeville and Scugog are all showing promise in detached home price growth.

“After an extended period of housing market inertia, the floodgates are breaking open,” says Alexander. “Upward movement in detached housing values and the threat of additional interest rate hikes in the future are prompting homebuyers to get off the fence and into the market. Rising consumer confidence, job security and an economy firing on all cylinders should continue to support healthy home-buying activity in the GTA for the remainder of the year and into 2019.”

Wayne Karl is Senior Digital Editor at Homes Publishing Group. wayne.karl@homesmag.com

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Canadian home prices expected to increase by 2 per cent in 2017: RE/MAX

Canadian home prices expected to increase by 2 per cent in 2017: RE/MAX

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Canadian home prices expected to increase by 2 per cent in 2017: RE/MAX

(CNW) — High demand and low supply continued to characterize Vancouver’s and Toronto’s housing markets throughout 2016 as competition from buyers for limited inventory of single-family homes pushed prices higher.

The average residential sale price increased 13 per cent in Greater Vancouver to approximately $1,020,300 and rose 17 per cent in the Greater Toronto Area (GTA) to an estimated $725,857, RE/MAX reported. Although demand remains high in both urban centres, limited inventory in the freehold market, the new 15 per cent foreign-buyer tax in Vancouver, and the recent tightening of mortgage rules by the federal government are expected to soften market activity in the short term.

In 2017, RE/MAX estimates average residential sale price will increase by 2 and 8 per cent in Greater Vancouver and the GTA respectively.

“RE/MAX expects the average home price in Canada to increase 2 per cent in 2017,” said Christopher Alexander, regional director, RE/MAX INTEGRA Ontario-Atlantic Canada Region. “Strong demand in Canada’s urban centres is expected to continue throughout next year and into the foreseeable future as almost half of Canadians plan to buy a home in the next five to 10 years, according to a recent RE/MAX survey.”

Regional markets in close proximity to Canada’s highest-price cities continued to experience steady interest from local move-up buyers and buyers from these cities (“move-over” buyers) who are looking to find a balance between affordability and square footage. This year, there were considerable year-over-year average price increases in Barrie (16 per cent), Hamilton-Burlington (20 per cent), Fraser Valley (20 per cent) and Kelowna (14 per cent).

Regulation changes at both the provincial and federal level towards the end of 2016 are already starting to impact activity in certain markets. The 15 per cent foreign buyer tax is expected to slow this trend somewhat, as price appreciation declines in Vancouver have resulted in some potential sellers staying in the Lower Mainland.

The ripple effect of the foreign buyer tax can also be felt in the upper end of the GTA and Montreal markets as some foreign investors are expected to look for properties in these regions rather than Vancouver.

Measures taken by the federal government to tighten mortgage insurance criteria for new homebuyers is expected to temper local first-time buyer activity across the country in the short term, but is not expected to have a long-term impact in most regions.

Homeownership remains a priority for Canadians, with 53 per cent of respondents in a recent RE/MAX survey conducted by Leger expressing intent to purchase a home and 47 per cent expressing intent to do so in the next five to 10 years.

Nearly one in three (30 per cent) Canadians plan to use the purchase of a home as an investment strategy to help fund their retirement, and 42 per cent of millennial respondents view it as a retirement funding strategy. A proportion of Canadians would also consider unconventional home financing options to realize their dream of ownership such as: purchasing a home with a family member (33 per cent); renting a room on a vacation rental site like Airbnb (15 per cent); renting out a room in their home (22 per cent); or even purchasing a home with a roommate (9 per cent).

The housing markets in Calgary and Edmonton remained relatively stable, with moderate declines in the number of sales and average residential sale price as a result of the prolonged recovery of the oil sector over the past two years. The average residential sale price in Edmonton decreased slightly, by 2 per cent year-over-year in 2016, while Calgary’s average residential sale price decreased by 4 per cent. Buyer activity is expected to pick up slightly in the second half of 2017 if employment opportunities in the oil sector continue to gradually come back to the province.

“The housing markets in Alberta’s two largest cities have remained resilient in 2016,” said Elton Ash, regional executive vice president, RE/MAX of Western Canada. “Low oil prices will continue to lead to tempered consumer confidence, but ongoing development projects in Edmonton and the recent approval of the Trans Mountain pipeline are expected to provide a boost to the provincial economy and help keep housing markets relatively stable in 2017.”

High inventory continues to be a factor in many regions including Regina, Montreal, Saint John and St. John’s, offering a good selection of product to first-time and move-up buyers in these cities. Local infrastructure projects and initiatives, such as preparations for Montreal’s 375th anniversary celebrations in 2017, are anticipated to provide a boost to these economies and their real estate markets next year.

The RE/MAX 2017 average residential sale price expectation for Canada is an increase of 2 per cent as Canadians continue to see homeownership as an important milestone as well as a good investment.

For the full 2017 RE/MAX Housing Market Outlook report, click here.

For more information about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca.


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