Relocating to Canada: Updated Housing Market Forecast
Posted by: Linda Lachapelle, Director, Mobility Solutions
This overview provided courtesy of the Canadian Real Estate Association (CREA) and Coldwell Banker Affiliates of Canada.
The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity in 2018 and extended the outlook to 2019.
Earlier in the year, there were questions on how the new mortgage regulations and rising interest rates would impact the market in 2018. It appears that the effect of the new mortgage rules in Canada was stronger than expected, and anticipated further interest rate increases have contributed to CREA lowering the forecast for sales and average price. According to statistics released by The Canadian Real Estate Association (CREA), national sales activity is expected to decline by 7.1% to 479,400 units in 2018.
The decline reflects weaker sales in B.C. and Ontario, amid heightened housing market uncertainty caused by policy measures, high home prices, ongoing supply shortages, and rising interest rates. The national average price is projected to ease to $498,100 this year, down 2.3% from 2017.
National sales are forecast to rebound modestly to 496,500 units, but remain below the high levels recorded in 2015, 2016 and 2017. The rebound reflects an expected partial recovery of sales over the second half of 2018 in Ontario and B.C. followed by a gradual softening in activity over 2019 as previously deferred activity wanes and interest rates continue to rise. The national average price is also forecast to rebound by 3.1% to $513,300 in 2019, placing it roughly in line with the 2017 figure. The increase reflects expected modest price gains in a number of provinces and a partial rebound of sales activity in B.C. and Ontario.
What Does This Mean to Relocating Employees?
While national average prices are projected to be down from 2017, the new mortgage 'stress test' regulations and expected higher interest rates will reduce affordability and, along with lower inventory in some markets, may impact some relocating employees’ home buying plans. With market uncertainty, some homebuyers may wait to purchase a home. As always, market conditions vary greatly by region, city, and neighborhood.
Additional Information on Trends in Canada
Download Cartus’ Canada Relocation Policy & Practices survey for key trends in Canadian relocation, including flexible policy approaches, support for homeowners, temporary and rotational assignments, and more.
Please feel free to email me at firstname.lastname@example.org with any questions on the Canadian market and how the survey findings apply to your program.