Canadian Home Prices expected to rise slightly in 2019, but not everywhere
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Home prices across the country are expected to rise in 2019, but only at a moderate pace compared with recent years, according to two of Canada’s largest residential real estate brokerages, and prices in at least one Saskatchewan City are expected to decrease in 2019.
Royal Lepage is predicting the national median home price will increase by 1.2 per cent in 2019, with prices in Toronto and the surrounding areas expected to rise 1.3 per cent to $854,552.
Home prices in Greater Vancouver are forecast to go up by just 0.6 per cent to $1.29 million, while home prices in Montreal and the nearby region are expected to see the largest rise out of Canada’s biggest cities, with home prices anticipated to jump three per cent to $421,306 in 2019.
“Markets aren’t perfect. They overshoot and then they must correct,” he said in a statement.
The Royal LePage report blamed the “tepid pace” of price growth on a number of factors including rising interest rates, global trade risks and the low price of Canadian crude.
It noted that would-be buyers who had for years been shut out of hot markets in Toronto and Vancouver may have a bigger opportunity to purchase in 2019. It says it expects a jump in sales activity come spring.
Meanwhile, in a separate report Tuesday, Re/Max said it expects average home sale prices to go up by 1.7 per cent in the new year.
It also anticipates housing markets across the country will stabilize as Canadians feel a bigger impact from higher interest rates.
“Demand isn’t as strong as it was in the past but it is still very, very strong,” said Christopher Alexander, executive vice-president and regional director of Re/Max of Ontario-Atlantic Canada.
“The government has said it may not be as conservative with raising rates as they have been in the past. That’s why there’s uncertainty. People don’t really know what to expect.”
Re/Max expects average home sale prices in Vancouver to fall three per cent next year, after increasing two per cent this year.
The report forecasts that some smaller cities outside of the big urban areas will see large price growth, with London, Ont., leading with a projected increase of 17 per cent, followed by Chilliwack, B.C., and Windsor, Ont., at 13 per cent.
Alexander said a more stable real estate market is positive for both buyers and sellers.
“The threat of a bubble bursting isn’t around the corner, and at the same time, there is going to be a little bit of an appreciation so people will get a return on their investment,” he said.
“We’re in healthy territory right now and homebuyers and sellers can feel confident that the market shouldn’t’ go too drastically in either direction.”
What about Saskatchewan?
Royal Lepage’s report doesn’t mention Saskatoon, but is predicting that prices in Regina will decrease 4.7 per cent in 2019 to an aggregate price of $311,505. It says Saskatchewan’s real estate market has been negatively impacted by the broader economic slowdown caused by weak commodity prices.
Housing inventory in Regina remains high despite the significant decline in new home starts, which has led to a supply and demand imbalance in the market that has added to downward pressure on prices. However, the region remains an attractive destination for immigrants, which may help to buoy the market in 2019.
“The challenges that plagued the Regina real estate market in 2018 may have ‘touched the bottom’ on our localized recession. Provincial GDP and hiring trends indicate that we may see a rebound by the second quarter of 2019,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “Those looking to buy are finding excellent selection, reduced competition from other buyers and affordable prices.”