Photo: James Bombales
After a rough start to the year, it seems as though the Canadian housing market may have finally adjusted to a range of new policy measures, and could start to rebound in the second half of 2018.
The recovery will be led by some of the country’s biggest housing markets, according to a new report from Scotiabank Economics.
“We look for the pace of home sales to recover in the second half of this year and continue on an upward trajectory in 2019,” writes the Scotiabank Economics team. “The rebound is expected to be led by developments in and around the Greater Toronto and Greater Vancouver areas, which continue to witness healthy economic expansions, and…Montréal, where the local market remains tipped in favour of sellers.”
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GTA home sales were up 2.7 per cent year-over-year in June, according to the Toronto Real Estate Board, while the Montréal market has been seeing major sales increases for months.
“The strength of the [Montréal] market is built on incredibly strong fundamentals,” Quebec Federation of Real Estate Boards market analysis department manager Paul Cardinal tells Livabl.
Cardinal points to Montréal’s employment market as a major factor in the sales boom, after the creation of a record 105,000 jobs in the last two years. Add in a low unemployment rate, increased migration numbers and consumer confidence that sits at a 15-year high, and you have a recipe for a red-hot market.
“Right now we’re forecasting a 5 per cent increase in sales and a 5 per cent increase in the median price of family homes [in 2018],” he says.
Meanwhile, Toronto’s shortage of new listings — which were down 18 per cent year-over-year in June — could push prices higher in the coming months.
“[The lack of supply] could cause more competition between various buyers, which could place stronger upward pressure on home prices,” Toronto Real Estate Board Director of Market Analysis and Service Channels Jason Mercer tells Livabl.
And smaller local markets continue to remain relatively balanced, according to the Scotiabank Economics team.
“Markets in the rest of the country are largely balanced, with the exception of major cities in the Western net oil-producing provinces, which are still absorbing inventory accumulated since the last oil-price correction in mid-2014,” they write. “Prices, however, have remained firm once one adjusts for the shift in the composition of sales from single-detached homes to more affordable unit types, such as apartments and townhomes.”