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A global real estate company is forecasting the average Canadian home sale price will climb next year despite the impact of lower oil prices on the housing market.
“While we expect to see some home price decreases, particularly in regions that rely on the oil and natural resource sectors, strong demand in Canada’s urban centres is expected to continue throughout next year,” said Gurinder Sandhu, RE/MAX’s CFO, in a statement.
In its 2016 Housing Market Outlook report, RE/MAX has average national home price growth pegged at 2.5 per cent for 2016, with cities in Ontario and British Columbia posting the strongest gains.
For the Greater Toronto Area, RE/MAX predicts the average home price to climb 5 per cent to $653,258 next year. In Greater Vancouver, price growth of 7 per cent to $1,013,665 is anticipated.
This year, RE/MAX noted a “spillover effect from the price increases in Greater Vancouver and the Greater Toronto Area” in regions surrounding these markets.
It appears the franchisor expects this trend to continue. Forecasted price appreciation in two markets near the GTA — Barrie and the Hamilton-Burlington area — is considerably above the national average.
RE/MAX predicts the average home price in Barrie will increase 5 per cent, bringing prices up to $362,303 and rise 4.3 per cent in Hamilton-Burlington to $455,270.
Areas surrounding the Greater Vancouver Area are also expected to outpace national price growth, albeit more modestly, with appreciation in Fraser Valley and Victoria forecasted to hit 3 per cent and 2.7 per cent, respectively. Such growth would bring the average price of a home to $566,706 in Fraser Valley and $590,525 in Victoria.
As Sandhu, RE/MAX’s CFO, noted, low oil prices have taken their toll on markets dependent on the energy industry and this downward impact on sale prices will persist next year, said Elton Ash, a regional executive vice president for RE/MAX of Western Canada.
“With oil price volatility continuing to make buyers feel uncertain, we do expect the average sale price to decrease next year, by 3.5 per cent in Edmonton and four per cent in Calgary,” he said in a statement.