The struggle to balance affordability and amenities has been at the forefront of buyer prerogatives across the country in 2017, and it would appear that’s going to continue into 2018. While that’s far from a rosy outlook for many buyers in Canada, it’s worth noting that it’s a trend that’s very pronounced in nearly every developed country in the world these days. Realities are just that – reality – and the most successful and satisfied buyers will be those that arm themselves with as much information as possible and then work within the current market.
Here at Real Estate Leads, our online real estate lead generation system has been especially well received through 2017, and we hope that continues into next year. The best real estate agents are those who are always working to be explicitly in the know regarding the market their clients are working within, and as such it’s always advisable to have a sound understanding of where home prices are going across the country.
Let’s take a look at what’s predicted in that regard for 2018, as it’s just around the corner.
GTA and GVA Continue to be Priciest
2017 had single-family detached home and condo markets diverging on distinctly different paths in Canada’s two priciest real estate markets, the Greater Vancouver and Greater Toronto Areas. The trend is expected to continue into 2018 as a mix of relative affordability for condo units has paired with price appreciation for detached homes to nudge many buyers toward condo ownership rather than looking for detached homes.
Vancouver
- Demand for condos continues to outpace supply, resulting in the average price of a condo rising an estimated 16% year-over-year, from $553,604 in 2016 to $643,778 in 2017. There’s no reason to assume anything will buck this trend as we look to 2018.
Toronto
- The GTA’s condo market saw price appreciation of 22% in 2017, as the average sale price for a condo rose to an estimated $523,437 in 2017, up from $429,241in 2016. What’s noteworthy here is the lack of stability in comparison to Greater Vancouver, with prices up a significant 8% in the GTA for 2017.
The single-family detached home segment of the market in both cities has been most significantly impacted by recent provincial government policy changes designed to slow the record-setting price appreciation in those regions over the last few years. Any constraint on the buying of detached homes, however, seems to be refocused on condominiums.
The majority of brokers from key real estate markets across Canada are expecting the average home price in Canada to increase 2.5% in 2018.
This of course suggests that the appetite for home ownership remains strong with roughly half of Canadians. Stats indicate that 48% of citizens are considering the purchase of a home in the next five years, and primarily for one of three reasons:
- To upgrade their current home
- To purchase a starter home as a means of entering the housing market
- To upsize from their current home to accommodate a change in family make-up
Another primary and ever-more common consideration for buyers is access to outdoor spaces with their new home. Green spaces are important, as is having a backyard for many.
Many buyers are continuing to look at real estate markets outside of the country’s largest urban centres to find a balance between the home features they’re after and what they’re able to afford. These ‘move-over’ buyers as they’re called are leaving the GTA and GVA and contributing to increased demand and considerable year-over-year average price increases in the following cities most prominently:
- Kelowna (9 %)
- London-St. Thomas (18%)
- Hamilton-Burlington (15%)
- Barrie (19%)
- Durham Region (19%)
- Niagara (23%)
- Kingston (8%)
- Ottawa (9%)
For Ontario in particular, much of the activity in regional markets has been fuelled by price appreciation in Toronto during the first four months of the year prior to the introduction of the provincial government’s Fair Housing Plan.
The new OSFI mortgage qualification rules that come into effect on January 1, 2018 are also noteworthy. They’ve impacted housing market activity toward the end of this year and are expected to slow activity in real estate markets across Canada in the first part of 2018. Suburban regions around major metro centres have and will continue to see increased demand resulting from this.
Some interesting statistics related to the average house prices and the way they correlate with owner / buyer / seller demographics across the country:
66% of Canadians are homeowners
- British Columbia: 62%
- Alberta: 78%
- Saskatchewan and Manitoba: 69%
- Ontario: 68%
- Quebec: 60%
- Atlantic Canada: 65%
48% of Canadians are considering purchasing a home in the next 5 years
British Columbia: 51%
Alberta: 60%
Saskatchewan and Manitoba: 43%
Ontario: 50%
Quebec: 40%
Atlantic Canada: 38%
90% of Canadian households with children would prefer to live in a home with a backyard and 79% would prefer to live in a single-family detached home compared to other property types
73% of Canadians would prefer to live in a detached home compared to the just 27% that prefer a townhome and 24% that would prefer a condo
37% of Canadians are not aware of the OSFI stress test regulation changes, or how they will affect their ability to purchase properties in the future
58% of Canadians are aware of the new OSFI stress test regulations. Of this group that is aware of the changes:
- 27% don’t believe it will impact the type of property they purchase in the future
- 18% believe it will impact the type of property they purchase in the future
- 13% are unsure of how the new regulations will affect their ability to purchase a property
For the full 2018 RE/MAX Housing Market Outlook report, click here.
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