Two Saskatchewan housing markets — Regina and Winnipeg — are expected to witness around a 2% increase in house prices next year as demand inflates and listings shrink, according to the latest outlook by RE/MAX.
Currently, there is a 7.7-month inventory in Regina, which is expected to reduce in spring 2020.While the mortgage stress test has made buyers more cautious about buying, the region will likely see increased interest starting next year.
"First-time home buyers are most interested in the popular property type, which is single detached homes, while retirees drive the condo market and are interested in townhouses with two or more bedrooms," RE/MAX said.
Move-up buyers are also expected to drive demand in 2020, extending the growth in luxury sales this year.
Regina's average residential sales price from January to October this year is at $302,015.This is projected to grow to $308,055 next year.
In Winnipeg, there are currently four months of inventory left.The average sales price in the region sits at $287,196 and is expected to hit $292,940 next year.
"The most popular type of properties are two-story detached homes and 2020 will see a shift of more new
The sudden turnaround in sales activity during the latter part of the year will likely cause a supply shortage in Canada next year, according to the Canadian Real Estate Association (CREA).
National sales trends improved at a faster-than-expected pace over the second half of 2019 as new listings continued to deplete.
"These trends have caused many housing markets to tighten, which has sharply lowered the national number of months of inventory," CREA said.
The balance between supply and demand hit its lowest since mid-2007 in November, resulting in increased competition among buyers.This provided a "fertile ground" for price gains, according to CREA.
The combined number of months of inventory in Canada, excluding the Prairies, and Newfoundland and Labrador, currently sits at a 15-year low and continues to fall.
"The number of homes available for sale in these provinces, which represent over 80% of national activity, is at a 15-year low.This is anticipated to support solid home price growth in 2020, particularly if current trends intensify," CREA said.
Given the limited supply, the national average sales price is expected to rise by 6.2% next year, led by projected gains in Ontario, Quebec, and
Thankfully, success in real estate doesn’t require an ability to predict the future.But having an idea where the market is heading is critical to making the right decisions.
PropertyGuys.com recently released a list of six trends that the company feels will have a lasting, potentially transformative effect on Canada’s real estate market in the coming years.Based on consultations with PropertyGuys’ network of agents, developers and customers in both Canada and the US, the trends presented paint a picture of a rapidly changing real estate environment where fulfilling tenant desires will require more of investors than simply adhering to the status quo.
PropertyGuys co-founder and lead analyst, Walter Melanson, says the trends identified suggest fundamental changes in the real estate market “that have us believing that this is more of what the future has to hold.”
Before its catastrophic public flameout, We Work changed how the owners of commercial properties could exploit the sharing economy to drive rents for properties that were otherwise either vacant or failing to achieve the rent appreciation they needed to remain profitable.
Melanson says residential landlords are now considering using rental properties in the same way.
National home sales edged up in November, buoyed by the increases in British Columbia and the Greater Toronto Area (GTA), according to the latest figures from the Canadian Real Estate Association (CREA).
There appears to be an even split between the number of local markets where sales activity rose and where sales declined.For instance, BC and GTA's improved sales turnouts were able to offset the slump in Calgary.
Actual activity was up by 11.3% on a yearly basis.On a monthly basis, however, national home sales rose by just 0.6%.
"Sales continue to improve in some regions and not so much in others.The mortgage stress-test doesn't help relieve the ongoing shortage of housing in markets where sales have improved, and it continues to hammer housing demand in markets with ample supply," said CREA president Jason Stephen.
The increase in home sales came with a decline in newly-listed homes.In fact, the number of new listings declined by 2.7%, placing them among the lowest levels posted in the past decade.This slump was attributed to the fewer listings in GTA.
With the limited supply, it is projected that house prices will continue to rise, said CREA chief
Fraser Valley is expected to continue being a buyers' market next year as more millennial first-time buyers commence their home purchase, according to the latest outlook from RE/MAX.
RE/MAX said Fraser Valley's population growth will continue to have the most significant impact on the housing market.
"The Fraser Valley housing market is currently witnessing a buyers’ market due to the substantially higher inventory compared to the previous year and more buyers qualifying for the stress test as they become more adjusted to it," RE/MAX said.
Due to the projected demand, average residential prices could increase by as much as 2% next year to $710,432.
"This is due to more Vancouverites moving to the region as they are being priced out of the market.The relative affordability of the area compared to Vancouver keeps it a hot real estate market," it said.
One neighbourhood to watch out for is Surrey City Centre.The developments in downtown Surrey, particularly high-rise condos, will attract not just homebuyers but also businesses to the area.
The infographic below shows the other highlights of RE/MAX outlook for Fraser Valley:
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British Columbia's Speculation and Vacancy Tax will increase from 0.5% to 2% starting 31 December, according to the Ministry of Finance.
The new tax rate will be applied to all foreign owners and satellite families and will be due by July next year.
"Based on the data from the first year, we see the tax is working as it was designed to:capturing speculators, foreign owners and people who own vacant homes, while exempting more than 99.8% of British Columbians," said Finance Minister Carole James.
The tax was introduced last year, with the aim to target homes in the most populated areas in BC that were not declared as a primary residence or were not rented out for at least three months annually.
Since the implementation of the tax, the government has collected $115m, which was used to fund affordable housing projects.
Aside from the tax rate, the changes will provide an exemption for property owners who are members of the Canadian Armed Forces while in active service.Canadians who own properties accessible only through water will also be waived from paying the tax.
Meanwhile, the exemption for rental-restricted strata will now end by
Canadian homebuyers who are looking to buy a house next year should consider Calgary, according to the latest outlook by RE/MAX.
The city is expected to record no growth in sales price expectation next year, making it a buyer's market, said the report.This would be due to Calgary's economy and high unemployment rate.
"Housing affordability isn't a concern due to low condo prices allowing buyers to easily enter the market.Despite the high unemployment rate, the city's population is increasing due to residents from other parts of Alberta moving to the city," RE/MAX said.
Three neighbourhoods are expected to be the hottest markets next year due to their affordability:Coventry Hills, Evergreen, and Northeast Calgary.
The city's overall younger population compared to the rest of Canada could indicate a stronger demand from first-timers entering into the market.
Condominiums and two-storey detached homes are expected to be the most popular property types next year.
Are you looking to invest in property?If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save
Canada's residential property market recorded slight increases in housing starts in November, according to the latest report from the Canada Mortgage and Housing Corporation (CMHC).
There were 219,047 units that commenced construction in the month, up from 218,253 units in October.CMHC said this trend measure is a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of housing starts.
"The national trend in housing starts was essentially unchanged in November, reflecting slight increases in the national trends of both multi-family and single-detached starts," said CMHC chief economist Bob Dugan.
The standalone monthly SAAR of housing starts for all areas in Canada was 201,318 units in November, a slight increase of 0.3% from 200,674 units in October.
The SAAR of urban starts also increased, up 0.4% in November to 188,559 units.
Multiple urban starts improved by 2.3% to 141,753 units in November, while single-detached urban starts decreased by 5.1% to 46,806 units.
Vancouver saw a significant decline in the trend of multi-unit starts for a second consecutive month.This is after a surge in construction activity earlier this year.
"This decline was offset by modest gains in the multi-unit trend in
After witnessing a slump in sales over the year, the Kelowna housing market is expected to find balance next year, according to the latest market outlook by RE/MAX.
RE/MAX said several factors could impact Kelowna's housing market next year, including taxation, weather patterns, and the lower mainland's economy.The average residential sales-price growth in the region is projected to be flat next year.
"The projected population growth for BC – approximately 50,000 new residents between now and 2040 – will also have a large impact on the housing market in the region as we look ahead to the next 3-5 years," RE/MAX said.
Of all property types, condos and detached homes with up to two storeys are expected to be the most popular.Buyers are likely to go after neighbourhoods such as Lower Mission and Westbank Centre for homes.
Kelowna North is projected to be the hottest neighbourhood due to its proximity to the downtown core, lake, and current development growth.
"Move-overs and first-time homebuyers are expected to drive demand in 2020 while luxury home sales in the region have tapered off year over year as a result of the new speculation tax impacting those
The changing demographics of Greater Montréal are likely to influence the dynamics of the real estate market in ways that could result in slowdown, according to the latest outlook by Canada Mortgage and Housing Corporation (CMHC).
It is expected that household formation in the city will decrease over the next 20 years, hinting at an overall slowdown in residential construction.
"Although total new-home construction is forecast to slow, an aging housing stock should continue to fuel the renovation industry.Despite the expected slowdown in housing starts, residential renovation spending should, therefore, continue to rise and so support the construction industry," said CMHC senior economist Francis Cortellino.
On the other hand, the Montréal's rental housing demand will likely grow in the coming years, driven by older households.This increase in demand will help absorb the surge in rental housing starts recorded last year.
In terms of resale markets, signs of overheating are starting to appear.However, Cortellino said the increase in the number of senior households in Montréal could bring about a rise in the supply of properties for sale and thereby contribute to "tempering market imbalances".
"Looking at the resale market, population aging will play a
Victoria's housing market is expected to be favourable for home sellers next year, according to the latest outlook by RE/MAX.
While conditions are likely to be balanced as 2020 unfolds, RE/MAX said the conditions in the British Columbian capital are expected to lean towards a sellers' market.
In fact, the region's average sale price is projected to increase by 3% to $698,661 over the next 12 months as demand remains high and supply remains limited.
"Housing affordability continues to challenge buyers in this region when it comes to homeownership and rentals due to lack of supply.Demand for condos continues to rise as many first-time homebuyers can afford this property type," RE/MAX said.
Neighbourhoods in the south, such as Fairfield, Rockland, Gonzales, James, and Downtown, are poised to be property hotspots next year due to high demand.
In terms of growth in sales prices, the top Victorian neighbourhoods are Saanich, Langford, Oak Bay, and Sidney.
First-time and move-up buyers are expected to drive the demand for property types such as condominiums, two-storey detached homes, and townhouses, according to RE/MAX.
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CREW readers who have picked up their copy of this year’s Property Forecast mega-issue will already be familiar with the high level of uncertainty that is expected to hamper both Canada’s housing market and its economy in 2020.
Housing projections remain fluid, and have increased in optimism as 2019 has rolled on, but with the global economy set for further turmoil, it’s fair for investors to question just how much faith to put in the housing market, particularly in high-priced, cash flow-challenged cities where continued appreciation is the only thing making the frequently colossal mortgages worth the risk.
But with rental demand skyrocketing in these same pricey markets, abandoning residential real estate altogether would be foolish.Investing in REITs may be the best way to avoid risk while actually generating significantly higher returns than buying rental properties.
That is not a typo.Investing in the equity version of real estate, like a real estate investment trust, has left investors better off over the last decade than investing in residential property in Toronto.
According to the Teranet-National Bank Home Price Index, the price of Toronto residential properties increased by 127% since the end of 2008.The S&P/TSX Capped
The Bank of Canada is likely to hold rates in its monthly meeting on Wednesday, according to a Finder poll of economists and industry observers.
The central bank will likely base its decision to keep the interest rate at 1.75% based on the current political uncertainty and its impacts on Canada's economy, particularly on consumer spending and housing markets.
"So far, we've seen little change in the trends in these sectors, suggesting that the bank will be happy to stand pat in December," said Brian DePratto, director at TD Economics.
Despite the economic concerns, Moshe Lander, an economics professor at Concordia University, said conditions are not "bad enough" to require a change in monetary policy.
"The Canadian economy continues to show signs of stress, but with so little room for interest rate cuts, the economy is not stressed enough to warrant using one of those cuts at this time," he said.
However, some economists think that a rate cut could happen during the first months of 2020.Scotiabank deputy chief economist Brett House said the central bank's statements were indicative of a future cut.
"Amongst a variety of statements that implied a cut
On November 19, Ontario’s Conservative government introduced Bill 145, the Trust in Real Estate Services Act (TRESA), a proposed replacement for the province’s Real Estate and Business Brokers Act (REBBA).After passing second reading on November 25, TRESA appears to be on its way to becoming the new standard to which Ontario’s real estate professionals will be held.
Ontario Real Estate Association CEO Tim Hudak is confident the changes laid out in TRESA will benefit investors by bringing more transparency to the real estate transactions and ensuring agents hew more closely to established ethical guidelines.
“Our goal is to make sure that the realtor by your side has the highest degree of professional standards, training and modern real estate tools to do the job,” Hudak says.“We also want to make sure that those that don’t do the job have a much stronger real estate discipline system to hold them accountable.”
In a province with over 50,000 real estate agents, most of whom complete one transaction or less a year, the fear of aligning oneself with a desperate realtor willing to do anything to earn a commission is real.Hudak says TRESA, once passed, will allow the Real
The rise of e-commerce has opened a window of opportunity for would-be property investors to get into the industrial sector.
This comes at a time when the presence of the brick-and-mortar sector is continuously being threatened by the gradually growing e-commerce sector, said Frank Magliocco, national real estate leader at PwC Canada.
"Fulfillment warehousing space is definitely at the top of investors' minds.It's a direct result of the increasing penetration of e-commerce sales.Because of that ride, there's a massive demand for fulfillment space that will grow even more in the near future.It's as simple as that," he told the Financial Post.
Magliocco said while e-commerce only represents 9% of retail sales in Canada, the sector will continue to have a "big impact" on industrial spaces.
Warehousing and fulfillment projects have been in the news recently, with Amazon announcing plans to build a new centre in Scarborough.DSV Canada is currently constructing a 1.1 million-square-feet centre in Milton, while UPS Canada is developing an 850,000-square foot facility in Caledon.
"The sheer size and scale of these projects are huge.Most are talking 1 million square feet or more," CBRE executive vice president Kyle Hanna