Taymaz Valley\/Flickr<\/a><\/em><\/p>\nCanada\u2019s newly-minted hottest housing markets are going to see prices soar even higher this spring while struggling regions will continue plodding on.<\/p>\n
At least that\u2019s what an economist with one of Canada\u2019s Big Six Banks is expecting to see as spring approaches.<\/p>\n
Canada\u2019s hottest markets aren\u2019t cooling down anytime soon<\/h2>\n
Marc Desormeaux, an economist with Scotiabank, suggests both Ottawa and Montreal will see \u201cpretty strong price gains\u201d in the coming months compared to historical norms. The two markets have broken out over the past year, leaving the country\u2019s previous top-performing markets, Toronto and Vancouver, in the dust.<\/p>\n
\u201cOttawa and Montreal are both well into seller\u2019s market territory,\u201d Desormeaux tells Livabl, noting that these markets have sales-to-new listings ratios of about 80 percent. A common gauge of market balance, the ratio is typically calculated by dividing sales by new listings in a given month and expressed as a percentage.<\/p>\n
A ratio of 100 percent suggests homes are selling at a rate as fast as new listings are appearing, and generally anything over 60 percent indicates a seller\u2019s market and below 40 percent means a market favour\u2019s buyers, meaning lower prices.<\/p>\n
In January, prices surged 7.1 percent in Ottawa and 6.3 percent in Greater Montreal, according to the Canadian Real Estate Association (CREA).<\/p>\n
Quebec\u2019s economy grew by close to 3 percent last year, Desormeaux notes, and the province has a very low unemployment rate. These two factors are supportive of continued housing demand in the near-term. \u201cOntario has been in the midst of quite a strong [economic] expansion,\u201d he adds.<\/p>\n
The worst is over for Toronto<\/h2>\n
Toronto also stands to reap some rewards from a healthy provincial economy, but market conditions aren\u2019t stacked in favour of seller\u2019s as they are in provincial counterpart Ottawa.<\/p>\n
\u201cAt present, the sales-to-listings ratio indicates that the Toronto market and a lot of nearby Ontario markets, are in roughly balanced conditions,\u201d says Desormeaux, anticipating more-modest price gains ahead.<\/p>\n
Last month, Greater Toronto Area home prices edged up 2.7 percent on a year-over-year basis, and the sales-to-new listings ratio \u2014 January\u2019s was 49.7 percent \u2014 suggests runaway price gains of the past won\u2019t be repeated any time soon.<\/p>\n
Western markets to remain depressed<\/h2>\n
Alberta, once home to hot housing markets benefitting from an oil boom, has struggled to adjust to an environment of lower oil prices and worsened employment prospects that have come as a result. Looking ahead, it doesn\u2019t appear markets like Calgary and Edmonton will have legs this spring.<\/p>\n
\u201c[A]n overhang of units accrued since the oil price correction remains intact and will likely limit home sales activity going forward,\u201d Desormeaux wrote in a mid-February report. \u201cWe continue to monitor conditions in Alberta.\u201d<\/p>\n
In that report for Scotiabank Economics, Desormeaux noted there was a sales bump in Greater Vancouver to start the year. But the new provincial Speculation and Vacancy Tax is yet another headwind piled on a market BC realtors say is still dealing with the effects of tougher mortgage qualification rules.<\/p>\n
\u201cThat\u2019s a key difference there between what\u2019s going on in Toronto… and what\u2019s going on in southern BC,\u201d Desormeaux tells Livabl. \u201cThere\u2019s the additional level of provincial policy coming into effect in British Columbia.\u201d<\/p>\n
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