Real Estate Marketing & Beyond
Last year, real estate prices in Canada reached an all-time high, but an article in the Huffington Post Canada points out that this year could be a very different story. This is at least in part due to new mortgage rules combined with higher mortgage rates.
In December, the average resale house price in Canada was $470,861, an increase of 3.5% compared to a year earlier according to figures from the Canadian Real Estate Association. This pace of growth is slower than seen just recently, mostly due to Vancouver’s slowing real estate market that is affecting data for the whole of the country. However, figures from Vancouver are still being offset by housing figures the Toronto where the market is still extremely active. Compared to the same month a year earlier, residential sales in Vancouver declined by 40%. The average price for all types of homes was $948,246 which is 3.4% lower than a year earlier.
Despite this decline, prices aren’t falling as much as sales simply because there are fewer homes on the market. The decline in property for sale was 34.9% in Vancouver in December, very similar to the decline in sales. In Greater Toronto and southern Ontario’s real estate market, there is also a decline in inventory levels. New listings in the Greater Toronto area are down by 12.4% and new listings also fell in the Niagara region and in Hamilton. Sales in the Greater Toronto area in 2016 increased by 7.9% last year, while the increasing demand for homes meant prices rose to $730,472, an increase of 19.9% in just one year.
In October 2016 the federal government announced new mortgage rules and mortgage rates went up slightly, but these have yet to show any impact on the housing data. Now, people are rushing to buy a property before these new rules reduce the amount they can borrow and experts anticipate that home prices will remain flat this year while the effects of higher interest rates may not be felt until the second half of 2017. It’s expected that property prices in Vancouver will remain stagnant during this year but will grow in Toronto and will increase by between 3% and 5% elsewhere in the country. Last month, TD Economics predicted a property price fall of 9% in British Columbia while in Ontario property prices are forecast to rise by 7%. TD expects prices to remain flat for the rest of the country, rising by just 0.2%.
Thanks for the article, I agree prices have flattened out and even come down from last year in my market area. It certainly will be interesting to see where the new mortgage changes, new home buyer plan in B.C., foreign investment tax and interest rate changes take us in 2017. I look forward to reading more from you.