Understanding Real Estate Trends
For millions of Canadians looking to buy or sell their home, the most important unanswered question is: Where is Canada’s Real Estate market heading? Canadians are not sure if the market is heading in the right direction or if it will come tumbling down in 2017. Most published reports and journals discuss about the flattening out of property prices in the real estate market. Apparently, certain areas in Canada are already witnessing a decline in prices and sales activity, while other parts appreciate the price gains, albeit at a slower speed than seen in the past.
Housing markets are susceptible to bubbles, especially when compared to financial markets. This is because of the large transactions and carrying costs associated with owning real property. But recently, the combination of regulations and low interest rates that make it easy to access mortgage financing has forced a shift. The influx of borrowers in the real estate market has in turn exerted pressure on the market’s demand.
Calgary’s Real Estate Market
Sales activity in 2017 is expected to fall, for the most parts. Have a look at the following MLS® HPI which provides a more precise picture of home price trends in Calgary.
We see that in Calgary, a sharp increase in home prices was seen Early 2015, with a steady decline since then. This data suggests that in Calgary and in many parts through Western Canada, it is a buyer’s market.
Rest of Canada
According to a publication by the Canadian Real Estate Association, state sales are projected to decline towards the end of 2017, at least by 3.3 percent. As indicated on the annual year-end report, the Canadian Real Estate Association stated that the transactions in BC and Ontario are expected to remain avid, but have still fallen short of record levels this year. This is primarily because of the reduction in affordability and the apparent lack of affordability priced listings for tightened mortgage rules as well as regulations.
A reduction in sales activity will also have a negative effect on prices, prompting the prices to fall. This is because fewer activities lead fewer demands, and this in turn forces house prices to fall. In its end of year report, The Canadian Real Estate Association argued that the reduction in sales in PEI was caused by the incredible 2016 selling season, which is not expected to take place in 2017. However, the market can still anticipate some rewards of a weakened Canadian real estate industry. But, on the right side, not all markets will be affected this year.
The Canadian Real Estate Association predicted that home sales will continue to shoot up in Quebec and Alberta because these markets had a slow sales season in 2016. However, a reduction in sales activity will force a decline in prices in several provinces such as Saskatchewan, B.C, PEI, Nov Scotia and Newfoundland as well as Labrador. For this reason therefore, the association says that the national average price will reduce this year by at least 2.85 percent, to settle at $475,900.