RE/MAX 2019 Housing Market Outlook Report

08 January 2019
Life and the City

    


Canadian Home Prices Expected to Increase by 1.7% in 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%. Housing markets across the country have stabilized in 2018, after the unprecedented increases in average sales price that many markets experienced in 2017. 

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.

"Due to the stress test and increasing interest rates, we are seeing more buyers in traditionally affordable regions in Ontario unable to enter the market,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham."

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.


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

Click here to read the complete RE/MAX 2019 Canadian Housing Market Outlook Report


Area Reports


Toronto

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 4% from $822,572 in 2017 to $789,181 in 2018, and overall sales down by 16%. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter the freehold market, and there’s now less of a price difference between freeholds and townhomes. 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 prices are expected to increase by 2% this year.Specifically, the sale of homes priced below $1 million is expected to remain strong in 2019, while homes priced over $1.5 million will be weaker overall. (Click image at left to view full Toronto report)

GTA: Oakville

Oakville transitioned from a seller’s market in 2017 to a balanced market in 2018, a correction triggered by the mortgage stress test. The effects of the stress test continued to impact the region through the first half of 2018, and then began to even out in the latter half of the year. The balanced market is expected to prevail in 2019. Oakville’s luxury market, which is driven by move-up buyers, continues to thrive and is expected to continue in 2019 due to the high liveability of the region, and some buyers moving away from urban city centres like Toronto. (Click image at left to view full Oakville report)

GTA: Mississauga

Mississauga is seeing a balanced market with some listings taking longer to sell or selling lower than list price. These conditions are expected to prevail into 2019. Mississauga’s luxury market is currently seeing an increase in activity, with new builds and newly renovated homes selling at a fast pace. Growing trends include Millennial’s being priced out of the freehold market. (Click image at left to view full Mississauga report)

  

GTA: Brampton

Brampton’s housing market was primarily driven by young couples and new immigrants in 2018, with many coming from other parts of the GTA, drawn by the region’s affordability and proximity to major highways. The future growth of health care jobs will attract professionals who want to live where they work. The condo market is expected to stay strong in 2019, especially with new builds ready for occupation. Property investors are active in Brampton, with basement apartments and detached homes seeing the most activity. The stress test significantly slowed down home sales in 2018, especially with single Millennial’s who once drove the Brampton market. This is expected to continue in 2019. (Click image at left to view full Brampton report)  

GTA: Durham

Durham has experienced a balanced market in 2018. Affordability in the region means that young couples and families will likely continue to drive the market in 2019. The mortgage stress test did affects some buyers’ ability to purchase a home in the past year. The region is relatively stable in price and inventory. The recent news of the General Motors closure in Oshawa is expected to have a minimal impact on the housing market as the region continues to diversify in education and transportation. (Click image at left to view full Durham report)

 

Click here to read the complete RE/MAX 2019 Canadian Housing Market Outlook Report


We can help you understand how these market stats and current conditions may affect the property values in your specific area. Get in touch with us by filling out the form below!

Please use the boxes below to contact us with a brief outline of your requirements:

Captcha image