Photo: James Bombales
The price of a home in Canada jumped 2.2 percent last quarter to $625,499, led by an increasingly strong Toronto market. And, according to data from Royal LePage, it’s a trend that should continue next quarter.
In its latest housing price forecast, Royal LePage is projecting a 1.5 percent increase in home prices over the next three months, with a 2 percent bump in the GTA.
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“Our expectation is that strong population growth in the GTA will fuel a continued rise in prices,” Phil Soper, president and CEO of Royal LePage, tells Livabl. “New households are forming, and that’s putting pressure on the existing housing stock.”
The aggregate price of a home in the GTA rose 1.3 percent last quarter, Royal LePage projects it will rise 2 percent to $853,097 in Q4.
Another possible boost in activity? The newly announced United States-Mexico-Canada Agreement (USMCA), which Soper says will have a psychological impact on the market.
“For awhile now, there was clearly something holding people back from entering the market, and I think uncertainty around trade had a role to play in that,” says Soper. “In our estimation it was a consumer confidence issue — it’s hard to make major purchase decisions in an uncertain environment. Having reached a deal should encourage more people to enter the market.”
Of course, there is always the potential negative effect of USMCA — rising interest rates. The Bank of Canada had expressed uncertainty about hiking its mortgage rate influencing overnight rate while trade talks were in progress. Now that they’re settled, the central bank is widely expected to raise rates later this month.
“The trade tensions were preying on the confidence of the Bank of Canada,” says Soper. “The agreement frees the way for the BoC to bump interest levels up.”