For the Canadian housing markets, 2016 was a year of highs and successes. However, amidst all the hoopla and noise, there have been some gray areas and areas of concern as well since the growth wasn’t equitable and well represented in all the domestic markets. The average selling price for a home (considering different types of homes) for the year 2016 was $490,495, up by 10.7% in comparison to the same period last year.
536,118 homes changed hands in 2016 through multiple listing service channels, a rise of 6.3% Y-O-Y according to the Canadian Real Estate Association (CREA). Ontario and British Columbia were responsible for the bulk of the sale in the residential real estate market, accounting for 66% of all existing residential real estate properties. British Columbia witnessed a rise of 9.5% Y-O-Y to 112,209 sales last year while Ontario saw 9.4% volume increase Y-O-Y to 243,400 transactions in 2016.
The picture was not so rosy in Alberta which witnessed a drop of 7.6% Y-O-Y to 52,169 transactions last year although activity increased in Calgary and Edmonton in December compared to November, last year.
Greater Vancouver remained the most expensive market in Canada with the average price of a home touching $1.02 million while the Greater Toronto area didn’t lag far behind as the average prices reached $729,591. This place also saw the highest gain in average prices Y-O-Y at 17.3% while average prices of homes last year in Fraser Valley in British Columbia also rose 17.2%. Greater Vancouver also saw a 12.7% increase last year in average home prices.
Interestingly, the markets remained muted in Edmonton, Regina, Winnipeg, Calgary, and Halifax-Dartmouth with an inconsequential increase in the average home prices witnessing Y-O-Y. Saskatoon capped up a bad year with a 1.2% fall in property prices. While Victoria saw a rise of 27.5% in the number of transactions, many places including Greater Vancouver, Saskatoon, Calgary, Edmonton and Hamilton-Burlington saw slippages.
What is in store for the 2017 housing markets?
2017 is expected to witness a tepid growth with average prices going up in oil-rich provinces and prices remaining muted in the rest. Sales volume-wise or total sales-wise, the markets are expected to do a lot worse. In addition to high unemployment and a downward spiraling economy, the Canadian federal government decided to introduce tougher measures last year in October.
This stress test would reduce the offtake further attributing to inventory clearance issues as tighter mortgage regulations would mean that in order to qualify for a mortgage people would have to save more before going for a buy-in or look for smaller value homes. To qualify for insured mortgages, one will now have to shell out a higher interest payment, which will undoubtedly dampen the mood.
Overall, the fight continues with inequality in income and lifestyles becoming more evident. Some markets are starting to breakout while others still struggle. Prices and sales are expected to see a sharp plunge. The new mortgage rules would also keep activities in check and the sentiment is not as bright as it was at the beginning of 2016.