Housing demand in hottest markets to diverge

The country’s hottest markets should expect varying degrees of housing demand this year, according to the latest analyses by Altus Group.

In particular, Ontario’s residential property segment will benefit the most from population growth and increased immigration.

“Markets in the Greater Golden Horseshoe, including the GTA, have the most upside potential for an increase in sales activity in 2019 given the depth of the decline in 2018 and building off of the sales recovery noted in the back half of 2018,” Altus explained in its outlook for this year.

This is in contrast to a relatively subdued 2018, especially in the condo sector, which saw the most significant cooling impact of the B-20 regulations along with new development charges. Last year’s sales remained down by almost 50% compared to 2017, Altus noted.

Ontario’s markets apart from the GTA, particularly Kitchener-Waterloo, magnetized greater demand in 2018 due to their condos’ affordability.

Read more: Number of housing starts across Canada dipped in December

Meanwhile, Vancouver saw a “remarkably constrained” supply of new homes last year. Going into 2019, Vancouver is “exhibiting the most potential for downside risk,” Altus warned.

The market will likely experience a notable decline in sales numbers this year, amid higher borrowing costs and mounting construction costs.

“A key challenge that has become more apparent as of late in Vancouver has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates,” according to Altus.