CANADIAN HOME PRICES EXPECTED TO INCREASE BY 1.7% IN 2019
Re/Max 2019 Housing Market Outlook
Posted On: Friday, January 04, 2019
Modest price increases are expected in 2019, as the RE/MAX 2019 Housing Market Outlook estimates the average sales price to increase by 1.7 per cent. Housing markets across the country have stabilized in 2018, after the unprecedented increases in average sales price that many markets experienced in 2017. However, there continue to be some outliers in 2018 average sales price gains, particularly in areas outside of the main city centres, such as Chilliwack (+ 13%), Windsor (+13%), London (+17%) and Charlottetown (+11%).
It is anticipated that the market will continue to stabilize, as Canadians will start to feel the pinch of higher interest rates as they move forward with their home-buying plans in 2019. A recent survey revealed almost one-third (31 per cent) of Canadians said higher interest rates have not affected their ability to get an affordable mortgage thus far. However, this is expected to change in 2019. A separate survey of RE/MAX brokers and agents found 83 per cent predict rising interest rates will make it more difficult for Canadians to purchase a home next year.
Edmonton may experience a decline of sales moving into 2019 as Alberta’s economy continues to recover. The federal government’s litmus test, higher interest rates and unemployment rates have led to a slow market overall in 2018 and is expected to continue into 2019. Conversely, the newly built luxury market is thriving with cannabis investors and migrant speculators purchasing homes, this may continue to drive the luxury home market in 2019. The upcoming May 2019 provincial election will be watch closely and, given the outcome, may help to shift the outlook for 2020 and beyond to a more positive one.
Key Findings from the RE/MAX 2019 Canadian Housing Market Outlook Omnibus Survey
Thirty-six per cent of Canadians are considering buying a property in the next five years. This is down from 48 per cent at the same time last year. The decrease is attributed to actual and perceived impacts of the mortgage stress test and rising interest rates on housing affordability. Thirty-one per cent of survey respondents said higher interest rates have not affected their ability to get an affordable mortgage so far, but the risk of future rate hikes, as indicated by RE/MAX brokers and agents, might affect these buyers in 2019.
Liveability continues to be important to Canadians, with more than half wanting to live closer to green spaces, work and better access to public amenities. Despite the apparent popularity of recreational cannabis since legalization in October 2018, 65 per cent of respondents said they do not want to live near a retail cannabis store. Specific figures:
- 52 per cent of Canadians would like to live closer to green spaces
- 47 per cent would like better access to public amenities
- 35 per cent would like to live closer to work
- 37 per cent would like to live closer to public transit
- 35 per cent would like to move to a different neighbourhood
- 59 per cent strongly disagree with living near a retail cannabis store
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