Modest price increases are expected in 2019, as the RE/MAX 2019 Housing Market Outlook estimates the average price to increase by 1.7 per cent. Housing markets across the country have stabilized in 2018, after the unprecedented increases in average prices 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 per cent), Windsor (+13 per cent), London (+17 per cent) and Charlottetown (+11 per cent).
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.
In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity this past year, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter the freehold market. The resale condo market, on the other hand, now represents almost 37 per cent of total residential sales, with its relative affordability fueling the rise of vertical growth. Average residential sale price is expected to increase by two per cent in 2019.
Communities such as Ottawa and London are sellers’ markets, showing increased growth in average residential sale price. This trend is expected to continue into 2019, however rising interest rates and the stress test continue to make it difficult for prospective buyers in other Ontario communities, including Barrie, Oakville and Durham regions.
Feel free to contact me for a copy of the Re/Max 2019 Canadian Housing Market Outlook Report