Mortgages

A Look at the Canadian Real Estate Market

new-1158139_640Some of our readers are Canadian, so we thought they might appreciate this update.

In a report conducted by Canada Mortgage and Housing Corporation (CMHC), Quebec housing market will moderate this year and increase next year. Due to the gradual economic growth in Quebec over the upcoming two years, the housing demand will stimulate housing demand. For those who plans to reside in the province of Quebec, it is advised to purchase now that the resale market will somewhat tighten because after 2015, demand will increase aggressively. Among the most popular areas for both local and foreign migrants in Quebec is Mont Tremblant. Find Mont Tremblant real estate listings and browse homes for sale here.

Likewise, The Canadian Real Estate Association (CREA) has forecasted home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2016 and extended it to include 2017. CREA’s recent report anticipated that although British Columbia and Ontario’s housing activity cooled down, the Canadian housing markets have intensified this early 2016. Price trends in these provinces reflect an anticipated slowdown in luxury sales activity due to shortage of low rise family housing projects.

In other Canadian provinces, price gains continue to be constant. Sales activity continues to accelerate higher in Manitoba, Quebec, and Nova Scotia. These provinces had been forecasted for improving economic prospects up to 2017. Sales in Prince Edward Island are also forecast to improve as the province continues to benefit from a lower Canadian dollar. This April 2016 Canadian real estate markets have set records: The national home sales went up by 3.1% from March to April. This activity was up 10.3% compared to April 2015. The MLS® Home Price Index (HPI) rose up to 10.3% as well and the national average sale price climbed 13.1% in April from 2015; net of the Greater Toronto Area and Greater Vancouver, it was up by 8.7% year-over-year.

These data was further intensified with housing sales reports recorded by Centris®. Moreover, around 68,500 to 76,000 sales are expected this 2016. The average price will range from $262,000 to $295,000. Luxury properties would continue to flourish and 25% of the country’s luxury properties within metropolitan areas have been purchases by foreigners, according to Royal LePage. As the intensified flow of foreign capital into the real estate sector, it is anticipated that greater sales would aggressively increase at the end of 2016.

In the past five years, the flow of money from China in particular into Canadian real estate has reached to “dangerous levels” which has come into debate whether to restrict foreign investment or not. Prime Minister Justin Trudeau stated that Canada has to be cautious in restricting foreign investments to also protect devaluing of home equities. Canada is not alone with these pressing concerns since New Zealand, Australia and the United Kingdom are also in preventive measures in controlling foreign ownership.

To foster help among prospect buyers, the government of Prince Edward Island and the Canada Mortgage and Housing Corporation pledge to support housing investments amounting to with $1.35 million as part of the Investment in Affordable Housing 2014-2019 agreement. The federal government would also invest around $1.5 billion over the next two years to intensify support for affordable construction of housing unit, and renovation of other housing programs.

In general, supply shortages and tight housing market conditions have become self-reinforcing price gains. As a result, some homeowners in these competitive markets list their home for sale, many homeowners decide to stay put and continue accumulating capital gains.

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James

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