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Christmas has come early for the Toronto housing market… and it’s also going to stay late into the new year if this fresh round of predictions comes true.
Following another strong month for home sales activity in November, the consensus among housing economists is that the trend will continue well into 2020.
Toronto’s housing strength has a lot to do with a solid labour market and population growth — both of which don’t seem to be going anywhere in the new year. Buyers are also able to stretch their budgets further as mortgage rates have come down since the end of 2018. Rates aren’t expected to rise significantly anytime soon either as the Bank of Canada announced this week that its mortgage-market influencing overnight rate would stay put.
It all amounts to an increase in demand for Toronto housing at a time when fewer homes are being listed. This dynamic is likely to send prices skyward at an accelerated rate.
Capital Economics economist Stephen Brown believes conditions are lining up in a way that’s reminiscent of the market peak in 2017. While he doesn’t expect activity to actually match those levels, Brown does acknowledge that the sluggishness that characterized the market earlier this year is likely firmly behind us.
It’s not just Canada’s largest city either. Vancouver — which has had a challenging year, to say the least — is primed for a bounceback in 2020 too, thanks largely to the same factors driving the market forward in Toronto.
But what of the global recession talk that dominated discussions around the country’s economic outlook, and by extension, its key housing markets?
Again, we look toward the Bank of Canada’s recent rate announcement — as reliable a source as any for commentary on the country’s economic health — for guidance. In its statement this week, the bank said recession concerns are “waning.” While global trade conflicts are still important to monitor, the Canadian economy appears resilient in the face of this ongoing uncertainty, especially when it comes to the housing market and consumer spending.
So while December is typically a seasonal low for housing activity, expect a much stronger showing than 2018’s performance. As for 2020, there are plenty of economist-approved reasons to be bullish about the Toronto housing market’s prospects for the year.
