Canadian home sales off to slugish start in 2019: Royal LePage
Canada’s housing market will remain slow for the rest of the year, with home prices expected to remain relatively flat through the typically-busy spring market, according to a new report from Royal LePage.
“We are expecting this to be a sluggish year overall in Canada’s residential real estate market, with the hangover from the 2018 market correction and weaker economic growth acting as a drag on home price appreciation, balanced by lower for longer interest rates,” Royal LePage President and CEO Phil Soper said in a survey released Thursday.
The forecast, which sees the national aggregate price of a home rising 1.0 per cent over the next three months, comes on the heels of new data from two of the country’s most closely-watched housing markets. The Toronto Real Estate Board reported flat sales for the month of March on Tuesday, while Vancouver’s real estate board painted a different picture when it reported sales in the region sank 31.4 per cent year-over-year for the month on Monday.
The market pegged to have the strongest price growth in the second quarter is the nation’s capital, with Royal LePage anticipating 2.8 per cent price appreciation in Ottawa. The report noted that prices in the city rose 7.7 per cent year-over-year in the first quarter, on the back of strong tech and government employment, placing the region’s home prices above Calgary’s for the first time ever.
Despite calls from the Toronto board to revisit some of the government’s mortgage policies – like the Office of the Superintendent of Financial Institutions’ B-20 stress tests – home prices remain high, Soper said. He added that this year’s slowdown will benefit buyers.
“There is a silver lining here,” he said. “This slowdown gives buyers, and first-time buyers in particular, an opportunity to buy real estate in our country’s largest cities.”
Royal LePage added that the federal government’s recent initiatives to help first-time homebuyers is a “welcome and necessary” development despite concerns from critics that the measures will overstimulate already-expensive markets.
“Without a healthy influx of first-time buyers, the entire cycle of real estate activity can stall,” Soper said. “There is the chance, however, that activity levels in the spring of 2019 will be reduced as some delay purchases, waiting for the First-Time Home Buyer Incentive to kick-in.”