Canadian real estate is doing well again over the last few months and experts predict a flourishing spring market ahead for the sector. As per several studies and reports, aggregate home prices in Canada went up by approximately 2.25 on a year on year basis to stand at $648,544 in Q4 2019. In similar fashion to the third quarter of 2019, prospective real estate buyers are returning to the realty market in higher numbers.
In H1 2019, buyers remained majorly on the fence, waiting to absorb the effect of the federal mortgage stress test. However, in the second half of the year, the entry of more buyers into the market reflected clearly in rising sales volumes and faster absorption of home listings. Going by these trends, the spring housing market is expected to be a thriving one as per industry watchers and experts.
Major market trends worth noting
According to experts, the Canadian housing market has shaken off the slump and correction and the value of housing units transacted in the market held up decently with single-digit minor price drops in some areas across B.C. and Ontario which witnessed aggressive inflation in prices over the last few years and regions still impacted by the slump in the oil and gas industry. Experts have stated that the federal government may come out with new measures for the mortgage stress test system this year.
The impact of the regulation has been different in various parts of Canada. The median pricing for two-storey homes increased by 2.3% (year on year) to touch $761,817 while the median bungalow price went up by 2.3% (year on year) to stand at $537,622. Condominiums were the housing type that witnessed the highest appreciation with median prices increasing by approximately 3.3% (year on year) to touch $487,525. Median pricing for condominiums went up by 7.8% (year on year) to touch $565,919 in the GTA (Greater Toronto Area) and 4.4% (year on year) in the Greater Montreal Area to stand at $338,148 in Q4 2019.
Yet gains in national prices were balanced out by yearly price drops in Greater Vancouver where median condominium prices came down by 3.4% to touch $645,607. Average home prices in Canada are expected to go up by 3.2% annually for 2020, touching $669,800. The 2020 prediction for Canada is that without any housing policy changes and firmly stable economic circumstances throughout the nation, the real estate market will continue to flourish, particularly in the spring.
Market trends in the GTA (Greater Toronto Area)
In the GTA (Greater Toronto Area), higher confidence of buyers and growth in population along with lower home supply, combined to drive price growth. In Q4 2019, aggregate home prices went up by a handsome 4.8% (year on year) to touch $843,609. In the same period, median pricing went up by 4.4% and 2.4% for two-storey homes and bungalows respectively. Some areas had healthy growth in prices while some had rates comparatively stable while some had prices skyrocketing due to huge demand and considerably lower supply levels of inventory.
Prices increased substantially in Pickering and Mississauga by approximately 9.7% and 7.9% (year on year) while aggregate home prices went up by 6.6% (year on year) for the City of Toronto. Oshawa and Ajax were the only two cities in this zone to witness a drop in aggregate prices of 1.2% and 1.8% respectively to touch $661,049 and $524,423 respectively.
Greater Montreal Area did well in the last quarter of the year
The Greater Montreal Area did well in Q4 2019 with prices going up by 6.3% approximately to touch $433,993 which is the highest appreciation rate ever since Q4 2010. Huge demand combined with lower inventory led to price growth in this region.
Median pricing for condominiums increased by 4.4% to touch $338,148 for this period. Property was fully intact in the fourth quarter of last year in Greater Montreal as per experts. Price growth will continue driven by higher sales backed by a flourishing economy and higher demand in all property segments.
Greater Vancouver recovers steadily
Greater Vancouver’s real estate market is recovering fast and even though it has seen a year on year decline in pricing, the market is moving towards higher stability. Aggregate prices of homes in Greater Vancouver came down by 4.8% (year on year) to touch $1,107,719 in Q4 2019. This was a lower rate of de-growth as compared to the third quarter of 2019 when prices fell by 5.2% (year on year). Median prices for bungalows and two-storey housing units came down by 6.7% and 4.7% respectively. Median prices of condominiums came down by 3.4% to stand at $645,607.
According to reports, sales figures have increased and inventory is reducing swiftly which indicates a fast recovery over the next few months and subsequent growth in prices. It is now a more balanced market in Greater Vancouver as per reports.
Ottawa witnesses decent home price increases
Ottawa continued witnessing home price growth due to a tighter rental market and lower levels of inventory. The aggregate home prices in Ottawa increased by 5.3% (year on year) in Q4 2019, touching $493,947. Median pricing for two-storey housing units went up by 4.4% to touch $521,524 while median bungalow pricing went up by 10.1% to stand at $501,195. In the same period, median pricing for condominiums increased by 2.1% (year on year) to stand at $329,828.
Sales figures were healthy throughout December 2019 for the Ottawa real estate market as per reports. With demand continuing to surpass supply levels of properties, growth in prices is expected in the spring as well. Ottawa has become a popular place to live in for several families since it offers ample employment, a strong economy and decent infrastructure. All in all, the Canadian real estate market is looking up fast and the spring market should be a positive time for the industry in general. Price growth is expected across most major markets with others swiftly shifting towards a steady recovery.