The real estate trends of Canada in 2019 was greatly influenced by the increase in population in large urban areas, healthy economic growth and robust labor market. The decade long financial fluctuation has made the urban population to consider real estate asset as one of the leverages against inflation and unpredictable market risks. While the new listings have fallen, the sale trends have improved drastically in the second half of 219. This, in turn, increased the demand for houses and paved the way for price gains.
Many government initiatives were also affecting the buying trends in a positive way. One such example is the First-Time Home Buyer Incentive. Under the $1.25 billion shared equity program, the federal government contributes a portion of the home purchase price in exchange for an equity share of the home’s value. The B-20 mortgage stress-test used by banks to qualify applicants has seen a decline in the mortgage interest rates. Though the decline in the benchmark rate has been modest, it is helping to improve homebuyer access to home purchase financing.
The top-tier cities which influenced the real estate market are as follow,
Vancouver
Vancouver’s real estate market flourished in the second half of 2019. The buyers were capable to match the current market price. The last half of 2019 reflected a strengthening top-tier market as sales over $1 million increased 37% year-over-year majorly by the single-family and attached home segments.
Calgary
The city of Calgary’s real estate market was majorly influenced by economic fluctuation and political anxiety. Residential real estate sales over $1 million decreased by 13% from 2018 levels overall; however, sales in the latter half of the year reflected a milder 2% decline from the same period in 2018.
Toronto
The Greater Toronto Area’s (Durham, Halton, Peel, Toronto, and York) top-tier real estate market thrived in 2019. Irrespective of the market decline in 2018 because of the implementation of tighter mortgage lending policies of the Ontario Fair Housing Plan, residential real estate sales over $1 million (condominiums, attached and single-family homes) increased 23% year-over-year. The City of Toronto continued to see a $1 million-plus activity escalate in 2019, with sales over $1 million increasing 20%.
Montreal
The city of Montreal saw a healthy demand for top-tier real estate in 2019, owing to the strong economic fundamentals and consumer confidence, as well as record-setting provincial population gains. Residential sales over $1 million saw a 13% increase from 2018 levels, while $4 million-plus luxury sales soared 64% year-over-year. For the first time, top-tier condominiums comprised over 20% of residential real estate sales volume over $1 million. As the city continued to raise its profile as a major Canadian luxury condominium market, sales of condominiums over $1 million set a new record with a 39% year-over-year gain.
Expected Real Estate Trends in 2020
The housing prices will rise in 2020 in many parts of Canada. However, sales will continue to accelerate. With the increase in population, economic growth and low unemployment rates, the national resale housing market will continue to thrive. Additionally, the Bank of Canada is expected to not raise interest rates in 2020.
National home sales are forecast to rise by 8.9% to around 530,000 units this year. This could be actually because of the weakly start in 2019. Of the forecast 40,000+ sales increase for 2020, British Columbia and Ontario are expected to contribute close to an additional 15,000 transactions each, while Quebec and Alberta are anticipated to contribute 8,000 and 2,000 additional transactions respectively.
The national average price is forecast to rise by 6.2% in 2020 to $531,000. Average price trends across Canada in 2020 are generally expected to resemble those in 2019, with small declines in Alberta, Saskatchewan and Newfoundland and Labrador, and solid gains in Ontario, Quebec and the Maritimes. In British Columbia, the average home price is expected to rebound in 2020. In regions with supply shortages, price gains may exceed forecast levels.
