Price growth is slowing, and sales are softening in the Canada real estate market this year. However, trends are not the same between provinces, or even within cities like previously red-hot Toronto and Vancouver. In places like Calgary for example, the oil price slump continues to bedevil values, offering great opportunities to astute investors with a longer-term view.
The Canadian Real Estate Market is Dead (As a Concept)
Real estate values no longer go up and down with economic tides in Canada like watermarks on jetties. Every suburb in every city in different, even adjacent streets can vary. A stranger moving into a city benefits from local advice, although real estate agents are expensive. When you ask Stonegate Investments for advice about buying in Calgary, you will find our commission structure delightfully different.
Huffington Post describes how “what happens in Canada’s largest and hottest housing markets, Toronto and Vancouver, respectively, is quite different from that in, say, recovering areas such as Calgary and Edmonton”. “Even so, momentum for home sales differs depending on location and type,” according to Canadian Real Estate Association President Andrew Peck, speaking to Wayne Karl.
Interest Rates will Likely Keep Rising and Softening Prices
Moreover, Bank of Canada’s revised stress test is making things harder. As of May this year, this increased to 5.34% to help make sure borrowers will continue to afford their mortgages in rising markets. This effectively reduces their purchasing power, while hopefully ensuring prices will not spin away from their grasp.
Price growth will therefore slow in response to this, although the effect will not be equal across all areas. The law of supply and demand will continue to exert influence especially in hot, popular areas. Detached houses are under high price pressure as buyers move further way from hubs to find what they can afford.
We Move Deeper into Condo Living Style as Tastes Change
Millennials and seniors alike now prefer smaller, more manageable homes as the extended family model vanishes from Canadian culture. Unrelated families will continue sharing larger, detached homes though, but only because they must. For these reasons, the prices of condos are likely to continue rising faster than the overall Canadian market.
Stonegate Equity Ltd. is perfectly positioned in Calgary to help you buy or sell your home at a price that is fair, and comes close to best value under prevailing conditions. Please call (403) 829-1661 for impartial advice, or share your thoughts here and we’ll get back to you soon.
Varsity NW, Calgary Alberta Canada: Brian Skinner BY Public Domain