Relocating to or within Canada: Home Sales Continue to Edge Up
This overview provided courtesy of the Canadian Real Estate Association (CREA) and Coldwell Banker Affiliates of Canada.
The volume of Canadian home sales increased for the sixth consecutive month in August, and transactions are now running almost 17% above the six-year low reached earlier this year in February, but remain about 10% below highs reached in 2016 and 2017. According to statistics released by The Canadian Real Estate Association (CREA), national home sales were up 1.4% month-over month in August, 2019.
Highlights of CREA’s recent report include:
- Actual (not seasonally adjusted) activity was up 5% year-over-year.
- Inventory levels nationally were at 4.6 months at the end of August - the lowest level since December 2017.
- The national average sale price was up 3.9% year-over-year.
The CREA updated its forecasts for home sales activity for the rest of 2019 and looking ahead to 2020, largely due to a decline in longer-term mortgage rates.
2019 Canada Home Sale Forecast
- Nationally, sales volume is now expected to increase 5% from the five-year low recorded in 2018.
- This represents a return to the 10-year average for sales activity, but is well below the annual record set in 2016.
- British Columbia, Alberta, Saskatchewan, and Newfoundland are all forecast to come in at, or near, multi-year lows in 2019.
- Manitoba, Quebec, and New Brunswick are expected to set new annual sales records.
- Ontario is forecast to be in line with the 10-year average for the province.
2020 Canada Home Sale Forecast
- Nationally, sales volume is forecast to improve slowly in 2020 by about 7.5%.
- The national average price is expected to gain a further 2.1%, though will remain below 2017 pricing levels.
- Ontario and Quebec are predicted to see sales volume rise by about 7%.
- Average price trends across Canada in 2020 are generally expected to be more moderate versions of those achieved in 2019, with small declines in Alberta, Saskatchewan, and Newfoundland and Labrador, and modest gains in Ontario, Quebec, and the Maritimes. In British Columbia, the average home price is expected to stabilize next year following this year’s decline.
What Does This Mean to Relocating Employees?
For home buyers, longer-term mortgage rates have been declining, including the Bank of Canada’s benchmark five-year rate. The Federal Government has also recently launched its First-Time Home Buyer Incentive, a shared equity program in which the government finances a portion of a home purchase in exchange for an equity share of the home’s value. The uptake on this is yet to be determined.
The tightened mortgage regulations (mortgage stress-test) that came into effect January 1, 2018 will continue to impact the market for the balance of 2019, but the effect varies by region.
Please feel free to email me at firstname.lastname@example.org with any questions on the Canadian market.