2017 Real Estate Outlook
Toronto to be Toughest Market
With RBC reporting the city is becoming 3% less affordabile in Q3 2016, Re/Max noting that GTA prices are set to rise another 8% to $783,926, and BILD reporting a severe shortage of land for new construction, Zoocasa is pointing to Toronto as 2017’s toughest market. Related: Townhouses – The New Real Estate Reality in Toronto
Condos to Heat Up
BILD reports sales of condos accounted for 60% of all 2016 GTA sales, up 24% from 2015, and so it would appear condos will continue to heat up as buyers are increasigly priced out of low-rise options. The average price of new condos in the GTA reached $493,137, a 10% increase from a year ago.
Vancouver Market to Fall Further
While the west coast city has been the hottest Canadian market for years, it experienced major deceleration in 2016. While there were already signs of softening demand, a surprise 15% tax for foreign buyers led to dramatic sales upheaval this year. By December, sales had dipped 20.2% year over year, according to the British Columbia Real Estate Association, with sales dollar volume down 25.2%. We see the decline continuing into 2017
Recovery in Alberta’s Market
With the downturn of the oil industry, the housing market in Alberta’s largest cities have transitioned from seller to buyer conditions; home prices softened 4% in Calgary between 2015 to 2016. Zoocasa sees the 2017 market more optimistic, with CREA calling for a 3.5% increase in sales and for prices to dip just 0.8%.
Fixed Mortgage Rates to Rise
Bond yields are set to rise higher in 2017 and the U.S. Federal Reserve hiking its trend-setting interest rate, and home-grown changes like the new rules impacting how Canadian lenders insure and sell their mortgage portoflios will continue to push fixed mortgage rates higher. Zoocasa will also be monitoring the proposal for lender risk sharing, which could put lenders on the hook for 5 to 10% of costs to mortgages that default, a cost that would be passed on to the consumer.
Variable Mortgage Rates to Become More Popular
Fixed rates will be priced less competitively, and its anticipated that the BoC will keep variable costs of borrowing low, possibly even cutting it further.
The preceding information was provided by Zoocasa. To learn more about Canadian real estate, visit www.zoocasa.com.