2018 began with a steep nationwide drop in housing activity. Stricter mortgage qualification rules pushed buyers to the sidelines, as year-over-year double-digit sales decreases became the norm.<\/p>\n
Of course, some markets had a rougher year than others. Toronto, with its strong early-2017 performance, had a particularly cool start to the year, as did Hamilton. In the west, the Calgary market is continues to deal with the effects of low oil prices which sunk the housing market in 2015, while Vancouver is still adjusting to a stricter foreign buyers tax that was increased in February.<\/p>\n
What does 2019 have in store for these troubled markets? Livabl has combed through the latest forecasts from industry experts, to give you an idea of what to expect.<\/p>\n
Toronto should remain stable<\/strong><\/p>\n With its record performance in 2017, the Toronto housing market became the epitome of the old adage \u201cthe bigger they are, the harder they fall\u201d in 2018.<\/p>\n While activity took its steepest dive in the spring of 2017, with the introduction of the Ontario government\u2019s Fair Housing Plan, sales dropped dramatically in January, as the market struggled to adjust to the new mortgage stress test.<\/p>\n Over the summer months, the city began to see a slow month-over-month rise in sales and prices. That\u2019s led several experts \u2014 including Phil Soper, president and CEO of Royal LePage \u2014 to predict a relatively cool, but stable, 2019. Sales were up 6 percent year-over-year in October, while listings fell a slight 2.7 percent.<\/p>\n \u201cThe numbers [you saw] in the GTA [in October] are the direct result of strong demand amid relatively limited supply,\u201d Soper tells Livabl.<\/p>\n It\u2019s a sentiment echoed by TD economist Rishi Sondhi, who wrote in his latest forecast that the Toronto housing market would remain balanced in the new year, as strong demand pushed up against deteriorating housing affordability.<\/p>\n \u201cToronto\u2019s market has been balanced for over a year now, manifesting in slower price appreciation,\u201d he writes. \u201cStrained affordability conditions, exacerbated by rising borrowing costs, will continue to restrain demand.\u201d<\/p>\n Hamilton will cool slightly<\/strong><\/p>\n The Hamilton market, which has long been a refuge for those priced-out of Toronto, largely mimicked the larger city\u2019s sales trajectory in 2018.<\/p>\n Home sales are predicted to fall 15.9 percent year-over-year by the end of 2018, according to the latest data from Central 1 Credit Union.<\/p>\n Many industry experts are predicting that the cooler period will last well into 2019, while noting that the city\u2019s strong fundamentals will keep things from changing too drastically.<\/p>\n \u201cWhat you have in Hamilton is a relatively affordable market, that allows those who cannot afford to live in Toronto a chance to own a home, while still commuting to work,\u201d Hamilton-based realtor Mike Heddle tells Livabl. \u201cThat\u2019s a trend that\u2019s not going to change any time soon.\u201d<\/p>\n Earlier this year, BMO economist Robert Kavcic named Hamilton one of Canada\u2019s most attractive labour markets, arguing that the city\u2019s strong job market will likely draw prospective homeowners in the new year.<\/p>\n \u201cGiven that Toronto has been held back by significant pressure on housing affordability, cities like Hamilton ….. within commuting distance of Toronto jobs, have served as a release valve,\u201d he wrote.<\/p>\n Calgary oversupply issue to persist<\/strong><\/p>\n At first glance, there\u2019s something that appears to bode well for Calgary\u2019s ownership housing market: the rental market is tightening. Normally, this has a knock-on effect for home sales. As a vacancy rate trends lower, rents get more expensive due to competition for apartments, and some decide it\u2019s worth it to purchase a home.<\/p>\n This time is different, suggests one expert. Lower oil prices have persistently taken a toll on home sales and prices in Calgary, and even though the rental market looks to be picking up, Keith Reading, director of research for Morguard, recently said it would be 18 months before demand is sufficient to drive rents up.<\/p>\n From there, it would still be a number of years before any meaningful improvements are seen on the resale and new-home markets.<\/p>\n While the Calgary Real Estate Board has yet to publish its final lookahead at 2019, its chief economist Ann-Marie Lurie recently gave Livabl an idea of what to expect.<\/p>\n \u201cThe current situation that we\u2019re in is we have an oversupplied market, prices have been trending down, and we just haven\u2019t seen the pickup in the economy \u2014 at least in Calgary \u2014 as what was expected, so that\u2019s really what we\u2019re seeing leading into next year,\u201d Lurie said in an interview earlier this month.<\/p>\n Vancouver will continue to correct<\/strong><\/p>\n When it comes to Vancouver\u2019s housing market, the peaks and troughs of various forecasts from analysts vary as wildly as the mountainous landscape surrounding the city.<\/p>\n For instance, credit union Central 1 predicts the median price of a Metro Vancouver home will drop by about 3 percent next year before remaining flat in 2020. \u201cA modest housing price correction is underway in the region triggered by rising interest rates and federal mortgage criteria which is intensified by provincial policy measures,\u201d writes Bryan Yu, Central 1\u2019s Deputy Chief Economist, noting a recent hike to the regional foreign-homebuyer tax and proposed speculation taxes.<\/p>\n Compare that to Capital Economics\u2019 latest analysis: based on rising levels of inventory, activity drying up, and tougher federal mortgage rules introduced back in January, home resale prices could fall 5 percent next year, in the research firm\u2019s estimation.<\/p>\n Perhaps the most dramatic prediction comes by way of Eitel Insights, which used stock market-style analysis to forecast the future of detached home prices in Vancouver. While the benchmark price of a detached home was $1,524,000 last month, Eitel Insights anticipates that number will fall to $1.4 million between next year and 2021 at the latest.<\/p>\n Like Capital Economics and Central 1, Dane Eitel, the owner of Eitel Insights, bases his bearish take on the impact of the federal government\u2019s move at the beginning of the year to extend stress testing to uninsured mortgages. Previously, a borrower could put down 20 percent for a loan from a big Canadian bank and sidestep the test.<\/p>\n While the relative affordability of multi-family dwellings in Vancouver has provided somewhat of a buffer for the pre-construction condo market despite new mortgage qualifying regulations, rising supply levels are expected to put downward pressure on prices in this segment, too. Already, new-home prices are down between 5 and 15 percent, depending on location and housing type, according to Urban Analytics.<\/p>\n