{"id":7761,"date":"2018-01-02T08:08:37","date_gmt":"2018-01-02T16:08:37","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=7761"},"modified":"2018-01-02T08:38:04","modified_gmt":"2018-01-02T16:38:04","slug":"why-regulation-wont-keep-canadian-housing-prices-down-for-long","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/01\/why-regulation-wont-keep-canadian-housing-prices-down-for-long\/","title":{"rendered":"Why Regulation Won&#8217;t Keep Canadian Housing Prices Down for Long"},"content":{"rendered":"<p style=\"text-align: justify;\">Prices in some of Canada\u2019s hottest housing markets are likely to cool during the first few months of 2018 \u2014 but don\u2019t expect them to stay that way for long.<\/p>\n<p style=\"text-align: justify;\">According to the Royal LePage Market Survey Forecast released today, recent policy changes will dampen housing prices in early 2018.<\/p>\n<p style=\"text-align: justify;\">\u201cOne of the most significant regulatory interventions in the housing industry in years is the incoming OSFI mortgage financing stress test,\u201d reads the forecast.<\/p>\n<p style=\"text-align: justify;\">Announced in October, the stress test will come into effect on January 1, and will require all uninsured mortgage borrowers to qualify against the Bank of Canada\u2019s five-year benchmark rate, or at their contract mortgage rate plus an additional 2%.<\/p>\n<p style=\"text-align: justify;\">\u201cRoyal LePage anticipates that the new measure will slow the housing market, particularly in the first half of 2018, as buyers adjust both their expectations and finances,\u201d reads the report. \u201cWith a large number of existing homeowners potentially failing the test when refinancing next year, a temporary reduction in consumer confidence may further stagnate price growth as potential buyers and sellers take a \u2018wait and see\u2019 approach.\u201d<\/p>\n<p style=\"text-align: justify;\">But it\u2019s likely to be temporary \u2014 Royal LePage CEO Phil Soper says that market conditions in Canada\u2019s biggest cities are too tight to keep prices down for long.<\/p>\n<p style=\"text-align: justify;\">\u201cAttempting to use public policy to steer property prices in huge, rapidly growing cities like Toronto and Vancouver is like a tugboat trying to turn an ocean liner,\u201d he writes in a statement. \u201cConsistent, measured policy can have a positive impact. Just don\u2019t try to turn the market on a dime or you risk sinking the ship.\u201d<\/p>\n<p style=\"text-align: justify;\">Soper says that while markets like Toronto and Vancouver aren\u2019t at risk of a crash, they are subject to aggressive home price inflation.<\/p>\n<p style=\"text-align: justify;\">\u201cDemand from migration, alongside demand from millennials who are increasingly becoming of home buying age, will continue to outpace supply [in BC and Ontario],\u201d reads the report.<\/p>\n<p style=\"text-align: justify;\">With this in mind, GTA home prices are expected to outpace much of the rest of the country at the end of 2017. Royal LePage forecasts that the average price of a GTA home will increase 6.8% to $901,392 by the end of the year.<\/p>\n<p style=\"text-align: justify;\">\u201cThis will largely be driven by price appreciation in the condo market as demand for entry-level properties is expected to continue to surge,\u201d reads the report. \u201cThe GTA\u2019s thriving economy and growing population has been supportive of an expanding housing market and this is expected to continue throughout 2018.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2017\/12\/regulation-canadian-housing-prices.html\" target=\"_blank\" rel=\"noopener\">A Tugboat Trying to Turn an Ocean Liner &#8211; Why Regulation Won&#8217;t Keep Canadian Housing Prices Down for Long<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prices in some of Canada\u2019s hottest housing markets are likely to cool during the first few months of 2018 \u2014 but don\u2019t expect them to stay that way for long. &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/01\/why-regulation-wont-keep-canadian-housing-prices-down-for-long\/\">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-7761","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why Regulation Won&#039;t Keep Canadian Housing Prices Down for Long &#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\/01\/why-regulation-wont-keep-canadian-housing-prices-down-for-long\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Why Regulation Won&#039;t Keep Canadian Housing Prices Down for Long &#8226; 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