Photo: Reg Natarajan/Flickr
This year won’t be a repeat of 2016 for the Canadian housing market — and that’s for the best, says one of Canada’s major real estate franchisor.
A tumultuous dynamic of enormous price growth in some major markets and depreciation in others came to define 2016, but a levelling off will occur in 2017, according to Royal LePage’s Market Survey Forecast, released today.
“Economic drama put real estate at the forefront of everybody’s mind last year, from the prime minister to the recent grad,” said Phil Soper, Royal LePage’s president and CEO, in a statement.
“In 2017, we anticipate a movement away from the regional extremes of real estate feast and famine — and that is a very good thing,” he added.
On a national level, here’s what Royal LePage forecasts this trend will look like: the aggregate price of a Canadian home, which includes condos and houses, will rise 2.8 per cent annually, down from this year’s soaring 13 per cent increase.
The tepid national price gains for 2017 will largely be a result of an expected correction for Greater Vancouver, a downturn that Royal LePage says will bring home prices in the region back to where they were in April 2016.
“Eroding affordability in BC’s Lower Mainland has reached unsustainable ground,” said Soper. “This, coupled with recently introduced policy measures and lower sales volumes, has put visible downward pressure on home prices,” he added.
While one of 2016’s hottest markets isn’t forecast to have a followup performance this year, Royal LePage’s outlook for another, the Greater Toronto Area, is decidedly more upbeat.
“Unlike Vancouver, where a price correction is underway, there is no relief in sight for the GTA — forward momentum and supporting fundamentals in the region are strong,” said Soper.
Royal LePage anticipates home prices will continue to climb this year in Ontario’s largest housing markets, with double-digit growth in the GTA.
Markets in Quebec, Atlantic Canada and Alberta will also help pick up the slack as the Greater Vancouver market wilts, suggests Royal LePage.
Alberta’s housing market, weakened by lower oil prices and energy-industry job losses, won’t fully bounce back this year. But the worst has already passed, suggests Soper, calling 2016 “the bottom for this correction phase of the cycle.”
Soper’s call is based on an oil outlook that is in line with what notable energy industry observers are calling for.
“We base our outlook not on a sharp increase in the value of oil, but upon maintaining a $50/barrel floor, allowing the energy industry to move into modest growth mode,” said Soper.