Housing Market for Greater Vancouver and Toronto
Vancouver and Toronto continue to be characterized by high demand and low housing market supply in 2016, with competition pushing prices higher due to limited inventory.
Greater Vancouver experienced a 13 per cent increase in the average residential sale price to $1,020,300, while the Greater Toronto Area (GTA) saw an increase of 17 per cent, to $725,857. In the short term, these two markets may soften slightly due to the recent changes to mortgage rules and the new 15 percent foreign-buyer tax in Vancouver. In 2017, RE/MAX estimates prices in Vancouver will increase by about two percent, while the GTA may see an eight per cent upswing.
Other regional markets located in close proximity to Canada’s highest price cities continue to benefit from interest from both move-up buyers, and from buyers moving out of the high price cities (move-over buyers). Several areas experienced double digit increases in year-over-year average prices including:
- Barrie – 16%
- Hamilton-Burlington – 20%
- Fraser Valley – 20%
- Kelowna – 14%
The new 15 per cent foreign-buyer tax in Vancouver has softened the market somewhat and as price appreciation declines in Vancouver, some potential sellers are now staying in the Lower Mainland. Both the GTA and Montreal are experiencing the ripple effect of the foreign-buyer tax as foreign investors are now looking in these areas, rather than Vancouver.
Housing Market Prairies and Maritimes
Calgary and Edmonton both saw moderate declines in the number of sales and the average residential sale price. This is due to the prolonged recovery of the oil sector in the past couple of years. Average residential sales prices dropped by two per cent in 2016, year-over-year, in Edmonton, while Calgary saw a decrease of about four per cent in the average residential sale price. If employment opportunities in the oil sector continue to slowly return to Alberta, buyer activity is expected pick up slightly in the second half of 2017.
Various regions such as Regina, Montreal, Saint John and St. John’s continue to be affected by high inventory, with a good selection of homes for first-time and move-up buyers. Local infrastructure projects and initiatives, like Montreal’s 375th anniversary celebrations, may boost the economies and real estate markets next year.
How important is home ownership to Canadians?
In a recent RE/MAX survey conducted by Leger, 53 per cent of respondents indicated they intend to purchase a home, and 47 per cent intend to do so within the next 5 to 10 years. Nearly a third of Canadians (30 per cent) are planning to purchase a home as an investment strategy, aimed at helping to fund their retirement, and 42 per cent of millennial respondents see purchasing a home as a retirement funding strategy.
A segment of Canadians would also consider unconventional ways of financing their home ownership:
- 33% would consider buying a home with a family member
- 15% would rent a room out on a vacation rental site such as Airbnb
- 22%would rent out a room in their home
- 9% would consider purchasing a home with a roommate
For more detailed information about what’s happening across the country, go to RE/MAX.ca.