Canada's Condominium Magazine
Recent reports have show stability in Canada’s housing market, despite regional fluctuations throughout the country. The data, especially inventory and price data, also show an apparent change in preference in the GTA to vertical condo living. The resales drops tend to be deceptive, against price surges in some verticals, pressured by low inventories.
The national market saw virtually no change in October, having fallen a mere 4.3 per cent from September, with a 0.04 per cent drop in price. Canada’s top housing markets have experienced the most significant changes firsthand, sending them in very different directions.
According to the Canadian Real Estate Association, over half of Canada’s markets have taken a hit in recent months. Among these is the Greater Toronto Area, which saw a 27 per cent decline in sales compared to a year ago. The Greater Toronto Area’s housing market dropped in May, mostly due to Ontario’s real estate reform, announced in April. The reform was designed to cool the GTA’s overheated market.
Vancouver’s housing market, however, climbed 35 per cent in October — which had its “pause” earlier (the B.C. government intervened earlier than the Ontario government) — making for a 0.48 per cent increase in home prices. A new foreign buyer’s tax was introduced in 2016, which originally caused Vancouver’s prices to plummet, though the market recovered by early 2017.
Toronto market stable
Three soft rises, indicate the soft-bottom has been reached and the Toronto market seems to be stable once more more. According to Bank of Nova Scotia Economist Adrienne Warren, national sales activity is showing signs of recovery, especially in regards to Toronto and surrounding areas.
“While sales in the region remain well below their earlier peaks, buyer nervousness following Ontario’s spring policy changes has eased,” she stated.
However, Canadian markets are facing further changes as regulations are passed across the board. The Canadian Real Estate Association (CREA) has shed light on newly passed regulations and their impact on the housing market going forward. CREA President Andrew Peck described mortgage regulations which will require buyers seeking mortgage financing to pass a stress test as of January 1st.
“This will likely influence some home buyers to purchase before the stress test comes into effect,” he said, “especially in Canada’s pricier housing markets. A professional realtor is your best source for information and guidance in negotiations to purchase or sell a home during these changing times.”
CREA’s Chief Economist, Gregory Klump, stated, “National sales momentum is positive heading toward year-end. It remains to be seen whether that momentum can continue once the recently announced stress test takes effect beginning on New Year’s Day. The stress test is designed to curtail growth in mortgage debt. If it works as intended, Canadian economic growth may slow by more than currently expected.”