Another chapter in the ongoing history of the Canadian housing market is about to come to an end.
With the holiday season nearly upon us, real estate economists’ collective view of the market’s performance in 2019 has just about crystallized and the consensus is that it was a solid year that could have gone much, much worse after a worrying opening.
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“With less than two months to go, 2019 will go down as a turning point for Canada’s housing market, marking the end of the biggest correction since the Great Recession,” wrote RBC Senior Economist Robert Hogue in a note published last week in response to the latest Canadian home sales data released for October.
The year played out in dramatic fashion. With Vancouver looking practically moribund in the winter and Toronto in only slightly better standing, it was difficult to tease out a positive story as the markets plodded through the first quarter of the year.
But by spring and into the summer months, fortunes reversed and the market overall has been on something of a hot streak. Some are even going as far to say that the housing market is once again a clear driver of economic growth for the country at a time when exports are weakened and the oil sector remains perpetually in the doldrums.
And to brighten the picture even further, the housing outlook for 2020 is resoundingly positive.
“We expect low interest rates, strong labour markets and rapid population growth to keep the recovery going in 2020,” writes Hogue. “Any expansion of the first-time home-buyer incentive — as promised by the Liberals during the federal election campaign — at the margin could stoke the market further.”
Hogue even points to a glimmer of hope that one of the country’s most stubborn housing challenges — affordability in Toronto and Vancouver — may be improving ever so slightly.
The RBC economist’s predictions for 2020 are backed up by the Canada Mortgage and Housing Corporation’s two-year outlook released in October. The Crown corporation expects home sales to continue to build momentum through 2020 and 2021 thanks to disposable income increases in Ontario and BC, along with strong demographic-driven demand for housing.