The Canadian real estate market has been predicted to slow over the coming months and into the new year. The cooling is expected to be accompanied by an increase in interest rates and the implementation of tougher housing rules across the country.
The predictions follow a Reuters poll that forecasted housing prices will increase by just 1.7 per cent in 2018, which is less than the 1.9 per cent expected in a similar poll just a few months ago.
For 2019, housing prices have been predicted to increase by 2.1 per cent followed by just two per cent in 2020. That is down from an earlier forecast of 2.5 per cent.
However, the expectations of the real estate markets in bigger urban centres like Toronto and Vancouver still remains above average. In Toronto, experts have predicted a three per cent increase while in Vancouver, housing prices are expected to rise 1.8 per cent this year and 1.7 per cent in 2019.
“We are going to see very modest price growth across all markets,” Robert Kavcic, senior economist at BMO Capital Markets in Toronto told the Globe and Mail. “We are seeing Toronto and Vancouver still adjusting to past policy measures and Bank of Canada rate hikes.”
The markets to watch in 2019 include Toronto, Vancouver, Montreal, Ottawa and Quebec City, according to PWC. They also predict some interesting developments to Winnipeg, Saskatoon, Halifax, Edmonton and Calgary.
My Place Realty’s Kris Thorkelson said they have already seen an increase in demand for quality housing.
“At My Place Realty, we focus on providing property that people are proud to call their home and we have seen how that approach works well in the Winnipeg market,” he said.
In Winnipeg, the GDP is expected to grow 2-4 per cent over the next couple of years. In addition, they have more homes to offer buyers. The city has also been experiencing a growth, but the housing market has managed to keep up.
“We know that we offer homes that are competitive, but reasonably priced and we plan on continuing that trend into 2019,” Thorkelson said.
Overall, the housing market will likely become even tighter for those looking for single-family homes, according to PWC. Particularly for home buyers in top urban markets. Even if the housing prices rise at a slower rate than initially expected, the cost may still be too much for consumers who are feeling an overall debt pinch.
The condominium market has stayed steady and affordable, good news for buyers and sellers alike. Its strength has been a result of a nearly impossible housing market. As investors and buyers look for affordable choices, the condo market has benefited. Experts expect it will stay strong so long as the demand is there and housing prices are too high for most to afford.
Another area that has been gaining ground is the multi-family market. Just as rising house prices have been feeding the condo market, those looking to buy a home have been forced to be more creative. Many Canadians are being out-priced from the housing market but are finding they can afford alternative options like multi-family dwellings. Earlier this year, Statistics Canada reported a $3.1 billion in building permits for multi-family rentals.