The advent of each year gives rise to a lot of speculation as to what the market sentiments will be like in the New Year. The Canadian housing market is no stranger to the ups and downs that frequently befall the real estate industry.
While 2017 was a fairly good year for the Canadian housing market, the scenario has shifted somewhat in 2018 with most housing localities of Canada reporting a downward slide in the growth numbers.
Here is a brief overview of what you can expect with the beginning of 2019 with respect to Canadian housing markets.
Stability is in store for the Toronto housing market
The sudden introduction of the Fair Housing Plan led to a dramatic drop in sales of houses at the beginning of 2018. However, the market has had time since then to settle to the new mortgage stress test.
The market has witnessed a constant month-over-month increase in the number of sales as well as the price of the property since then. With a current growth rate of about 6%, 2019 should be a pretty stable, if not a robust year for the Toronto housing market.
A dry period of sales for Hamilton
Hamilton too has been affected by the Fair Housing Plan and its housing market has followed a similar trajectory as that of Toronto. However, while Toronto is likely to recover quickly owing to the large demand and low supply in the city, Hamilton will probably not be able to follow suit.
The sales in Hamilton have been on a disappointing 15.6 % decline towards the end of 2018. It is predicted that even the first half of 2019 will not see much improvement in the housing market of Hamilton.
No hopes for Calgary yet
Calgary’s housing market took a major beating because of the consistently low oil prices in 2018 which affected the buyer’s purchasing capacity and made them turn towards renting options instead.
Although an increase in the demand for rented properties tends to drive up the cost of rent and consequently pushes people towards investing their money in buying a house, this scenario is still not possible in the near future for Calgary. A survey has shown that it will take at least 18 months to be able to witness visible growth and that too after assuming that the demand for rented accommodation will persist.
Vancouver’s price correction to continue
Vancouver which has been burdened with burgeoning real estate prices has recently undergone a modest price correction due to the newly introduced tax rules as well as the increase in interest rates.
It has been predicted that prices of properties in Vancouver will probably fall by at least 3 to 5 percent in 2019 and will stabilize by 2020. The simultaneous increase in the supply of new accommodation in the market will also play a key role in Vancouver’s property price correction.
The forecast for Canadian housing markets may not look too bright for 2019 but it will still be a far cry from the dull growth of 2018. Toronto as well as Hamilton, to some extent, are likely to recover from their slump and stabilize.
On the other hand, Vancouver’s markets are still expected to work on price correction. Calgary too seems to be on the mend. However, it will be some time before we actually see robust growth in all the housing markets of Canada.