There’s huge speculation regarding the condition of the Canada real estate market this year, particularly after the fluctuating market trends observed last year, i.e. in 2018. While experts differ from one another on the trends that will shape the Canadian realty market in 2019, most seem to agree on one basic principle, namely that real estate markets will continue to thrive albeit at a slower pace and there is growth around the corner. A lot of it has to do with the flourishing economy that Canada has and this will help immensely in tiding over things in spite of there being limitations like the mortgage stress test, increase in rates by the Bank of Canada and sky-high prices in several markets which pose major barriers towards affordability and the entry of first-time homebuyers into the market.
While TREB continues its appeal for leniency in the stringent mortgage stress test in order to relieve first-time homebuyers and ramp up sales volumes, there are other initiatives underway to look at the creation of more affordable housing supply or mid-range supply in major Canadian cities in a bid to lower prices and make it easier for first-timers to buy their own homes. These efforts may or may not bear fruit; what matters however is the forecasts for 2019 as estimated by several experts and these are mostly positive and point to a steadily maturing market overall as far as the Canadian real estate sector is concerned. Canada offers an improved quality of life overall which will continue to make it more attractive to people migrating here in search of good employment or educational opportunities. Canada has good access to food, housing, jobs, education and healthcare for its citizens with the unemployment rate at a low 5.6% as estimated by several experts.
Canada offers a good lifestyle for foreign investors and settlers alike and has a flourishing economy as well. Canada draws thousands of business travellers, tourists and other visitors annually on account of its strong economic condition. It has also ranked top amongst several countries last year with regard to overall quality of life. These are factors that will continue driving more investment in Canada, particularly in its housing sector. The commercial real estate sector will keep getting more investments this year as forecasted by several experts and this could positively impact the residential space as well. More jobs will naturally lead to higher demand for housing, something that could bring in higher residential sales volumes and boost rental markets as well.
Trends to watch out for in 2019
As estimated by several market experts, Toronto, the capital of Ontario, will be a key player in the real estate market for 2019. The real estate market was at a low overall for Toronto last year. As per several reports, prices came down by approximately 4.35 in 2018 and sales volumes for homes also decreased overall by around 16% with listings coming down by 13% overall. Increasing mortgage rates were a major factor behind the performance drop as far as Canadian real estate was concerned, what with lending becoming more stringent and homes costlier. However, in spite of these market patterns, there should be a mini boom in the Toronto real estate market in 2019 as anticipated by experts.
This is because of the fact that Toronto will keep drawing more commercial real estate investments and infrastructural developments, the condo boom and influx of several technology biggies will lead to higher job creation and more interest in residential housing. This should certainly be a major boost for Toronto and the entire GTA (Greater Toronto Area) this year. However, investors have to be careful of several market factors including political aspects. Global trade disputes and the economic slowdown in China may impact the global investment scenario overall.
As per experts, in the GTA (Greater Toronto Area), the overall sales volumes for property touched a handsome $21.1 billion for last year. This was however lower as compared to the record levels seen in 2017 although this was really impressive by all means. Residential land activity, however, came down by 31% which led to the decline in sales volumes for the GTA. However, Canada is poised for a revival in real estate since there will be an economic boost due to trade negotiations with the United States. The economy continues to do well in British Columbia as well.
The fundamental components are strong in British Columbia and there will be growth of the housing market here in 2019. There will be an increase of the population and lower housing supply levels as a result. This will keep prices growing while sparking more demand at the same time as per reports. There should be more long-term housing projects taken up in this zone in order to balance out the market as felt by experts. Ontario has comprised of a whopping 40% of the overall population in the country as per reports, i.e. 14 million individuals.
In 2019, listings should go up across Ontario for land and housing units alike. The open border policy will be a major advantage for investors in this part of the country as well. There seems to be an optimistic outlook overall for real estate in Canada this year, partly due to economic growth and also due to the fact that people have now absorbed most of the impact arising from measures like higher interest rates and the stringent mortgage stress test. Canadian real estate should do better in 2019 although the pace of growth could be slower as opined by experts.