{"id":10622,"date":"2018-10-22T10:10:18","date_gmt":"2018-10-22T17:10:18","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=10622"},"modified":"2018-10-17T14:57:34","modified_gmt":"2018-10-17T21:57:34","slug":"why-canadian-home-prices-wont-surge-anytime-soon","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/10\/why-canadian-home-prices-wont-surge-anytime-soon\/","title":{"rendered":"Why Canadian Home Prices Won&#8217;t Surge Anytime Soon?"},"content":{"rendered":"<p style=\"text-align: justify;\">After a slow start to the year, Canadian home prices have been warming up for months. But does that mean that the market will gradually return to the record highs seen in spring of 2017?<\/p>\n<p style=\"text-align: justify;\">Not anytime soon, according to many industry experts. While much of the downward pressure on the market has started to ease, there are several factors standing in the way of a full-blown prices boom.<\/p>\n<p style=\"text-align: justify;\">For a closer look at the current situation, Livabl has rounded up the latest expert commentary, to keep you in the know.<\/p>\n<p style=\"text-align: justify;\"><strong>Interest rates are going up<\/strong><\/p>\n<p style=\"text-align: justify;\">The Bank of Canada is widely expected raise its mortgage rate-influencing overnight rate on October 24. On Tuesday, a relatively weak housing starts report led economists to predict that the hike was pretty much a sure thing.<\/p>\n<p style=\"text-align: justify;\">\u201cDemand continues to be supported by the fastest population growth in 27 years and new millennial-led households,\u201d wrote Sal Guatieri, a senior economist with BMO. \u201cA calmer housing market is just what the doctor ordered, and won\u2019t discourage the Bank of Canada from raising rates on October 24.\u201d<\/p>\n<p style=\"text-align: justify;\">Over at RBC, senior economist Nathan Janzen agrees that the starts report all but guarantees the BoC will raise rates on the 24th.<\/p>\n<p style=\"text-align: justify;\">\u201cEarlier housing market activity was probably too strong to be sustained,\u201d he wrote, in a recent note. \u201cThe slowing to a more manageable pace of activity should be welcomed by the Bank of Canada and isn\u2019t expected to prevent further gradual interest rate hikes.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Policy is still dampening the market<\/strong><\/p>\n<p style=\"text-align: justify;\">Rising interest rates will likely dissuade some would-be homebuyers from entering the market in the coming months. That, combined with the lingering impact of new mortgage rules which came into effect in January, should put a damper on price growth.<\/p>\n<p style=\"text-align: justify;\">\u201c[Slow home price growth in September] may indicate that the worst adjustment to factors like [new mortgage rules] is working its way through,\u201d wrote Derek Holt, VP and head of capital markets economics at Scotiabank, in a recent note.<\/p>\n<p style=\"text-align: justify;\">The comments echo a recent forecast from Moody\u2019s Analytics and RPS Real Property Solutions, which predicted a period of slower price growth over the next five years.<\/p>\n<p style=\"text-align: justify;\">\u201cThe national housing market still has a long way to go before it regains the level of affordabil\u00adity it had before 2015, when prices in Toronto and Vancouver took off, but has now taken the first steps to do so,\u201d wrote Moody\u2019s economist Andrew Carbacho-Burgos, in the report.<\/p>\n<p style=\"text-align: justify;\"><strong>Markets in the west are struggling<\/strong><\/p>\n<p style=\"text-align: justify;\">And not every market is dealing with the same conditions. While prices have been steadily rising in Toronto, Vancouver and Calgary have continued to struggle for months.<\/p>\n<p style=\"text-align: justify;\">The Teranet-National Bank Composite Price Index remained flat last month, largely as a result of the underperforming western markets.<\/p>\n<p style=\"text-align: justify;\">\u201cWhen seasonal effects are removed, the composite price index edged up in September, recovering some of the ground lost in previous months,\u201d writes Marc Pinsonneault, a senior economist at National Bank. \u201cWhile this applies in particular to Toronto, it is not the case for Vancouver and Calgary, where the seasonally adjusted indices extended a string of declines.\u201d<\/p>\n<p><a href=\"https:\/\/www.livabl.com\/2018\/10\/heres-canadian-home-prices-wont-surge-anytime-soon-according-experts.html\" target=\"_blank\" rel=\"noopener\">Here&#8217;s Why Canadian Home Prices Won&#8217;t Surge Anytime Soon According to Experts<\/a> by Sarah Niedoba | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>After a slow start to the year, Canadian home prices have been warming up for months. But does that mean that the market will gradually return to the record highs &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/10\/why-canadian-home-prices-wont-surge-anytime-soon\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-10622","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why Canadian Home Prices Won&#039;t Surge Anytime Soon? &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/10\/why-canadian-home-prices-wont-surge-anytime-soon\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Why Canadian Home Prices Won&#039;t Surge Anytime Soon? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"After a slow start to the year, Canadian home prices have been warming up for months. 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&#8226; Rory C Real Estate | Oakwyn Realty","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.roryc.ca\/blog\/2018\/10\/why-canadian-home-prices-wont-surge-anytime-soon\/","twitter_card":"summary_large_image","twitter_title":"Why Canadian Home Prices Won't Surge Anytime Soon? &#8226; Rory C Real Estate | Oakwyn Realty","twitter_description":"After a slow start to the year, Canadian home prices have been warming up for months. 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