The Royal Bank of Canada (RBC) has already forecasted several trends for the Canada real estate market this year. The RBC has stated that overall home affordability will once again come down throughout major cities in Canada on account of increasing prices. This will be partly due to a combination of reviving housing demand in key markets and due to other macro-economic factors. Home prices will only go up marginally this year in Canada although it will bring down home affordability further. The home ownership cost in comparison to median income is one ratio that will keep rising. Higher rates of interest will also make mortgages costlier as per the Royal Bank of Canada.
Toronto is the biggest housing market in the entire country and the home ownership cost will equate to roughly 79% of median household income of roughly $71, 631 by Q4 2019 which is higher than 76% witnessed last year. Toronto should witness a definite price increase in 2019 due to the large number of new projects, commercial progress, influx of top companies, growing employment opportunities, influx of professionals and skilled talent for projects and subsequent housing demand, particularly for condos.
Home prices may go up overall by 0.5% this year with sales volumes going up by 5.6% which is certainly a positive development for Canada’s real estate industry as per forecasts made by the RBC. Vancouver should witness home prices coming down by roughly 2.5% in 2019 while sales volumes will be moderate enough. Yet, home ownership costs in Vancouver will be 88% of median income at roughly $77, 410 by Q4 2019 which is quite similar to last year.
Home affordability will slightly come down as per the RBC although buyers will be more interested in buying property in several Canadian cities due to the impact of lowered or steady pricing. The Bank of Canada will continue to hike interest rates in order to cool the market. Home affordability may also come down in Ottawa, Edmonton, Montreal and Calgary as per reports. Canadians will overall spend 56% of median incomes to buy homes. However, RBC has also predicted that average disposable incomes of households will increase by approximately $2, 300 for 2019 which is good news for those looking to purchase new property. This will be a better cushion and keep most households stress free post buying property.