As we progress into the last quarter of 2015, Hammond International Properties is taking a brief look at what is happening – and what is anticipated to happen – in the Canadian Real Estate market.
The demand for luxury property remains high. International buyers influence this market significantly, especially in British Columbia and Ontario. Properties in the $4 million range sold extremely well in the Greater Toronto Area and Vancouver in the first half of 2015.
Stronger than Expected Home Sales Activity in Ontario and B.C.
Ontario and British Columbia account for approximately 60 per cent of Canadian housing activity, and because they have experienced results stronger than expected, they have contributed to an upward revision to the Canadian Real Estate Association’s forecast for national sales activity and average prices.
The national average price for a home has run higher than expected since the association’s last forecast (currently it’s around $433,600), in part reflecting a jump in the proportion of higher priced home sales in the Greater Toronto Area, Lower Mainland and Calgary.
In Toronto and the GTA, the ongoing shortage of detached homes for sale continues to drive very strong price gains. Sales would be even higher in Ontario if there were more homes available.
B.C. continues to see some of the strongest economic growth in Canada, and this is coupled with strong demographics. Inventories are low and prices remain high compared to the rest of the country.
Canadian Interest Rates Remain the Same
The Bank of Canada recently announced that it was keeping its target overnight lending rate at 0.5 per cent. “Little has changed since the Bank’s previous announcement and revised economic forecast published in July,” stated CREA.
The Bank’s September announcement serves as a placeholder as it awaits more economic data prior to the release of its Monetary Policy Report, which will occur October 21. The Bank may revise its economic forecast in October to reflect how ongoing weakness in the oil industry could continue to offset strengths in other economic sectors. As a result of the low oil price, economic growth could be weaker in the second half of the year than anticipated.
National sales are predicted to reach 495,000 in 2016, about the same as this year’s forecast sales. The national average price is expected to edge higher by two per cent to $442,400 in 2016. Activity gains in Quebec and in Prairie provinces are likely to offset a slight cooling for activity in B.C. and Ontario, however prices in Ontario are expected to climb (2.8 per cent) due to an ongoing supply shortage of listings for low rise homes in and around the GTA. Alberta and Quebec can expect to see average home price growth of about 1.7 and 0.8 per cent respectively, while Nova Scotia and Newfoundland and Labrador are forecast to edge slightly lower.
Are you considering buying or selling a luxury estate? Hammond International Properties specializes in high-end properties and will ensure all of your expectations are met. To speak with a Hammond representative, please call 1.877.702.7870.