Photo: [Rikki] Julius Reque/Flickr
Canada’s largest housing markets are showing “promising momentum” heading into the spring and remainder of 2014, says Sotheby’s International Realty.
Part of what is fueling the surging market, says Sotheby’s, is $1 trillion worth of inheritance that Canadian baby boomers will bequeath to millennial first-time buyers over the next 20 years. Good news as a recent BMO report suggests 30 per cent of first-time homebuyers are relying on financial assistance from parents and family.
Other reasons for Sotheby’s rosy outlook include increased foreign investment due to a weaker Canadian dollar, healthy immigration levels, and of course, historically low interest rates that aren’t expected to rise until 2015.
Taking a closer look at Canada’s four largest urban centres, Sotheby’s says…
- Due to a lack of inventory, home sales and prices are expected to rise slightly above the 10-year average with modest gains anticipated in the second quarter of the year
- Spring sales activity will also be driven by rebounding consumer confidence and historical low mortgage rates
- Low levels of resale and rental inventory combined with strong consumer demand suggest a continuation of the bidding war trend and above-asking prices, particularly for single family homes
- Economic strength from oil, gas and potential pipeline projects will support gains in immigration and net migration, bolstering demand for housing
- Strong Toronto sales will be driven by a lack of inventory in the downtown core with a ripple-out effect to the city’s perimeter
- The luxury market is also expected to remain healthy into 2014, as sales of homes over $2 million were up close to 20 per cent year-over-year in the first two months of 2014
- Leading the country in international immigration, newcomers to Toronto will continue to fuel a real estate market already in short supply of rental and resale housing
- The overall performance of Montreal’s spring housing market will be closely tied to the outcome of the provincial election on April 7th, with sales momentum slowing until an electoral decision is reached
- Economic hurdles that will continue to temper the city’s real estate market include rising taxes, an unemployment rate that exceeds the national average and diminishing government revenues
- Favourable influences include strong immigration numbers (the second highest in the country) and a Canadian exchange rate that supports Montreal’s manufacturing and exports sectors, as well as its climate for foreign real estate investment.
You can download the full report as a PDF here.