What Does 2019 Have In Store For The Canadian Real Estate Market?
2018 began with a steep nationwide drop in housing activity. Stricter mortgage qualification rules pushed buyers to the sidelines, as year-over-year double-digit sales decreases became the norm.
Of course, some markets had a rougher year than others. Toronto, with its strong early-2017 performance, had a particularly cool start to the year, as did Hamilton. In the west, the Calgary market continues to deal with the effects of low oil prices which sunk the housing market in 2015, while Vancouver is still adjusting to a stricter foreign buyers tax that was increased in February.
What does 2019 have in store for these troubled markets? Livabl has combed through the latest forecasts from industry experts, to give you an idea of what to expect. Here is what they forecast for Toronto and Hamilton markets in 2019.
Toronto should remain stable
With its record performance in 2017, the Toronto housing market became the epitome of the old adage "the bigger they are, the harder they fall" in 2018.
While activity took its steepest dive in the spring of 2017, with the introduction of the Ontario government's Fair Housing Plan, sales dropped dramatically in January, as the market struggled to adjust to the new mortgage stress test.
Over the summer months, the city began to see a slow month-over-month rise in sales and prices. That's led several experts — including Phil Soper, president and CEO of Royal LePage — to predict a relatively cool, but stable, 2019. Sales were up 6 percent year-over-year in October, while listings fell a slight 2.7 percent.
"The numbers [you saw] in the GTA [in October] are the direct result of strong demand amid relatively limited supply," Soper tells Livabl.
It's a sentiment echoed by TD economist Rishi Sondhi, who wrote in his latest forecast that the Toronto housing market would remain balanced in the new year, as strong demand pushed up against deteriorating housing affordability.
"Toronto's market has been balanced for over a year now, manifesting in slower price appreciation," he writes. "Strained affordability conditions, exacerbated by rising borrowing costs, will continue to restrain demand."
Hamilton will cool slightly
The Hamilton market, which has long been a refuge for those priced-out of Toronto, largely mimicked the larger city's sales trajectory in 2018.
Home sales are predicted to fall 15.9 percent year-over-year by the end of 2018, according to the latest data from Central 1 Credit Union.
Many industry experts are predicting that the cooler period will last well into 2019, while noting that the city's strong fundamentals will keep things from changing too drastically.
"What you have in Hamilton is a relatively affordable market, that allows those who cannot afford to live in Toronto a chance to own a home, while still commuting to work," Hamilton-based realtor Mike Heddle tells Livabl. "That's a trend that's not going to change any time soon."
Earlier this year, BMO economist Robert Kavcic named Hamilton one of Canada's most attractive labour markets, arguing that the city's strong job market will likely draw prospective homeowners in the new year.
"Given that Toronto has been held back by significant pressure on housing affordability, cities like Hamilton...within commuting distance of Toronto jobs, have served as a release valve," he wrote.
Source: HuffPost (edited)
Thinking of buying or selling a property, or have a question regarding the real estate market? Fill out the form below and I'll get back to you promptly.