previously noted how weak February home sales<\/a> were partly the result of rough weather.<\/p>\n\nBeyond warmer weather ahead, Porter highlights three factors that should be supportive of higher home sales on the heels of improved activity in March, when home sales inched up a seasonally-adjusted 0.9 percent from February.<\/p>\n
First, Porter cites \u201crate relief,\u201d noting that lower interest rates are once again boosting home sales.<\/p>\n
Last year, it was expected the Bank of Canada would continue hiking its policy rate, which impacts mortgage interest rates, but that\u2019s no longer the consensus given a weaker-than-expected performance from the Canadian economy.<\/p>\n
The second encouraging factor is Canada\u2019s growing population. \u201cIt\u2019s not running at the fastest pace in a generation,\u201d Porter points out. Population growth is a key driver for housing markets as it creates demand for accomodations.<\/p>\n
And then there\u2019s the 2019 federal budget, which was released last month and includes a number of housing-related measures.<\/p>\n
Among them is a shared-equity mortgage scheme that will see the Canada Mortgage and Housing Corporation give qualified households up to 10 percent the value of a home in exchange for a corresponding equity stake in the property.<\/p>\n
The feds also increased the amount of money first-time homebuyers can take out of their RRSPs to $35,000, up from $25,000.<\/p>\n
\u201cThis year\u2019s Federal Budget measures will eventually provide some modest support for demand as well,\u201d says Porter.<\/p>\n
For now, national home prices remain muted. The benchmark price of a Canadian home was $617,200 in March, up 0.8 percent from February but 0.5 percent below the same time last year, though Porter notes there is a stark divide from east to west.<\/p>\n
\u201cPut it this way, all 8 major reporting cities west of Ontario saw average prices decline from a year ago in March,\u201d he writes. \u201cIn stark contrast, of the 18 reporting cities in central and eastern Canada, only 3 reported price drops.\u201d<\/p>\n
The differences between the Toronto and Vancouver area markets underscores this regional divergence.<\/p>\n
In the Greater Toronto Area, the benchmark price of a home is $779,100, an increase of 1.5 percent over February and 6 percent compared to March 2018.<\/p>\n
Greater Vancouver, on the other hand, saw the benchmark price dip 0.5 percent on a month-over-month basis to $1,011,200. That\u2019s 7.65 percent off year-ago levels.<\/p>\n
\u201c[T]he regional divide is wide,\u201d says Porter.<\/p>\n
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