The national housing market isn’t expected to become a more friendly environment this year
The stricter mortgage qualification rules introduced at the beginning of 2018 will continue to bear down upon both sales activity and base prices across the Canadian housing market this year, according to a recent analysis by real estate portal Zoocasa.
Average price levels are predicted to grow by only a miniscule 1.7% (up to $496,800) this year. Data from the CREA also indicated that total nationwide sales will fall for another 0.5% in 2019, after an 11.2% drop last year (down to 458,200 transactions).
The reverberations will be particularly apparent in Calgary, Newfoundland, and Ontario, but Zoocasa also warned that B.C. – especially Vancouver – will suffer the most significant effects.
This was supported by data from the British Columbia Real Estate Association, which reported a 23% decline in housing dollar volumes (down to $52.4 billion) and a 23.6% shrinkage in end-of-year-to-date sales.
The analysis also cited a 1 Credit Union report, which raised the alarm on a likely “housing recession” in B.C. over next 3 years.
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In addition, a slowdown in new mortgages already set by the trend announced by the CMHC late last year is predicted to continue in 2019. The Crown corporation’s Q2 report noted that the number of new mortgages in 2018 fell by 11.9% year-over-year, down to 205,000.
The BCREA’s end-of-year assessment of the situation dovetailed with the CMHC’s findings.
“The impact of the mortgage stress test is weighing heavily on traditional lenders’ ability to grow their mortgage books, with growth in residential mortgages at its slowest pace in 17 years.”
