Photo: Ipshita B/Flickr
It’s the kind of hangover no amount of water or rest can remedy.
Canada’s housing market is feeling the “hangover” effects from last year’s correction, says the CEO of a major Canadian real estate company — and it’s likely going to continue suffering through 2019.
“We are expecting this to be a sluggish year overall in Canada’s residential real estate market, with the hangover from the 2018 market correction and weaker economic growth acting as a drag on home price appreciation, balanced by lower for longer interest rates,” says Phil Soper, president and CEO of Royal LePage, in the company’s House Price Survey, published today.
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“There is a silver living here. The slowdown gives buyers, and first-time buyers in particular, an opportunity to buy real estate in our country’s largest cities,” Soper continues.
One of Canada’s biggest banks noted last month that Canadian housing affordability was improving for the first time in more than three years, and Royal LePage is calling for “relatively flat” home prices this spring, with close to half of the regions surveyed anticipated to see quarterly price declines.
Greater Vancouver home prices are forecast to decline 1.4 percent in the second quarter on the heels of the slowest March for sales activity in a generation. That is the deepest expected drop of any of the nine major markets included in the survey forecast.
“The Greater Vancouver area remains one of the most desirable places to live in the world. Population growth is driving household formation and employment levels high. Yet policy intervention has induced a drop in home sales to levels not seen in three decades,” says Soper in the report, echoing comments the Real Estate Board of Greater Vancouver issued this week.
Regina follows with a 1.2 percent decline, while the battle-worn Calgary and Edmonton are projected to see prices fall by 0.5 percent and 0.4 percent, respectively, as the region still struggles to rebound in an era of off-peak oil prices even amid recent gains.
Royal LePage is calling for Ottawa to be the hottest market this spring at quarterly price growth of 2.8 percent, besting Montreal, where gains of 1.6 percent have been pencilled in. Both markets were recently flagged for overheating.
The Toronto market has been on a roll, and Royal LePage doesn’t foresee stopping future growth in the coming months. “The City of Toronto is still one of Canada’s fastest appreciating real estate markets,” says Soper. Toronto area prices should rise 0.5 percent this quarter, according to Royal LePage.
Soper suggests that “the medium-term outlook for housing remains very positive,” citing full-time job creation. “Full-time employment turns renters into buyers,” he explains.