There has been a lot of speculation regarding the spring housing market in Canada and quite naturally so, since the realty market in the country has sometimes been at its unpredictable best. Many had previously predicted a massive slowdown and slump although it has not happened. In fact, the ground situation is far from it. Major cities in the country are actually witnessing solid demand and growth of the commercial sector and rising employment are also contributing to higher residential demand. New projects are being built and prices are largely at stable levels although affordability levels are still a matter of concern. However, the Government and other authorities are doing their bit to stimulate the growth of affordable housing in a bid to make it possible for almost everyone to own homes.
Spring price trends in Canada housing sector
Experts feel that the real estate market will be on the slower side in spring and for much of 2019 on account of diverse factors. As a result, prices could remain on the flatter side in the spring season which is usually considered to be a major period for the residential realty market. Experts have reported that 2019 will be a little sluggish as far as the Canada real estate market is concerned. There will be the after effect of the correction in the market in 2018 and slower growth of the economy. Appreciation in housing prices will be slower and this will be balanced out by the comparatively lower rates of interest as per studies.
The flat housing prices may actually be good news for homebuyers who will certainly like the chance to buy properties at more reasonable price points. Experts forecast that aggregate home prices throughout the country may increase by only 1% over the next 3-4 months which makes it better for first-time and prospective homebuyers since they will be able to land premium units at comparatively lower rates. TREB (Toronto Real Estate Board) has previously released reports for March 2019 and sales figures were largely on the flatter side. The realty board in Vancouver, however, reported de-growth in sales volumes by a whopping 31.4% on a year on year basis for March 2019 as per studies.
Ottawa should witness stronger growth in prices in Q2 and prices may go up by around 2.8% backed by steady demand. Prices in Ottawa have already increased by 7.7% on a year on year basis for Q1 2019 due to higher employment in the government and technology sectors and this brought prices at higher levels as compared to Calgary for the very first time. TREB has reportedly been asking for a review of several mortgage measures of the Government including the B-20 stress tests of the OFSI (Office of the Superintendent of Financial Institutions) and home prices still remain at comparatively higher levels. Experts feel that this slump will prove to be highly lucrative for prospective buyers. The slump will offer more chances to first-time homebuyers and other buyers to snap up real estate in the biggest Canadian cities at lower prices.
The initiatives taken recently by the federal government for assisting first-time homebuyers were also positive developments as per experts. With more first-time buyers expected to come into the market, the realty sector will be reviving steadily. However, overall market activity will be lower in spring this year since there will be people postponing home purchases in anticipation of the First Time Home Buyer Incentive programme’s implementation.
What’s on people’s minds?
Several reports and studies state that more people will be looking to opt for home renovation this spring while many people will be waiting a little more for purchasing their dream home in Canada. Contractors and other professionals should have a busy period this spring with more owners of housing units looking to scale up spending on renovations instead of putting their properties on the block. As per recent studies, only 8% of home owners are planning to list/sell their housing units in the spring and 6% of people are looking at purchasing housing units in this season. 39% of owners are also thinking of renovating their homes.
There is of course the prediction that Canadian realty markets will not be performing excellently in 2019 and renovation should increase amidst a scenario where affordability of homes becomes a tricky issue. Many people will be renovating to scale up home values instead of going through the stress test for buying a second home. These are potential homebuyers looking to up the values of homes a bit so that they can sell in the future and upgrade to bigger housing units when the economy revives once again. There is steady migration to Canada from other countries and also amongst provinces, sparking high demand for rental housing units and hence several owners may transform their dwellings into suitable rental units.
All in all, even if the spring could be slightly subdued, people will look to purchase housing units at lower or flatter prices in 2019. The price trends will end up benefiting a higher number of homebuyers as opined by industry watchers and experts.