{"id":7854,"date":"2018-01-01T09:40:20","date_gmt":"2018-01-01T17:40:20","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=7854"},"modified":"2018-01-01T09:40:20","modified_gmt":"2018-01-01T17:40:20","slug":"canadian-housing-market-headlines-to-watch-out-for-in-2018","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/01\/canadian-housing-market-headlines-to-watch-out-for-in-2018\/","title":{"rendered":"Canadian Housing Market Headlines to Watch Out for in 2018"},"content":{"rendered":"<p style=\"text-align: justify;\">The Canadian real estate market made headlines plenty of times in 2017 \u2014 but what does next year have in store? Will housing prices and affordability continue to dominate the conversation, or will new developments emerge?<\/p>\n<p style=\"text-align: justify;\">BuzzBuzzNews has rounded up predictions from industry experts for the new year, so you\u2019ll know what to watch out for in 2018.<\/p>\n<p style=\"text-align: justify;\"><strong>The market will continue to cool \u2014 for awhile, at least<\/strong><\/p>\n<p style=\"text-align: justify;\">The Bank of Canada hiked the overnight rate 50 basis points from its historically low 0.5% in 2017, and it\u2019s predicted to continue the trend in 2018. That means Canada\u2019s housing market will likely continue to cool, at least for the next few months.<\/p>\n<p style=\"text-align: justify;\">\u201cWe expect rising interest rates will drive the next phase of the [housing market] correction in 2018, as higher rates add to strained affordability in major markets that ultimately tamps down on homebuyer demand,\u201d writes RBC\u2019s economics team in a recent report.<\/p>\n<p style=\"text-align: justify;\"><strong>Canada\u2019s economy to slow, thanks to the housing market<\/strong><\/p>\n<p style=\"text-align: justify;\">While red hot prices in markets like Toronto and Vancouver were a considerable boost to Canada\u2019s economy in 2017, a cooler housing market will contribute to slower economic growth in the new year.<\/p>\n<p style=\"text-align: justify;\">\u201cEconomic growth is anticipated to moderate [in 2018], partly reflecting a return to a more sustainable pace of housing activity,\u201d reads a recent report from TD senior economists Leslie Preston and Brian DePratto.<\/p>\n<p style=\"text-align: justify;\">The sentiment is echoed by RBC\u2019s economics team, who write: \u201cAfter several years of consumer spending and housing activity acting as the main engines of growth, changes to regulations in the housing market and rising interest rates are setting up for a moderation in housing resales and ancillary purchases.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Mortgage change up bad news for buyers<\/strong><\/p>\n<p style=\"text-align: justify;\">Much has been said about a new mortgage stress test which will come into effect on January 1. The test will require all insured mortgage borrowers to qualify against the Bank of Canada\u2019s five-year benchmark rate, or at their contract rate plus an additional 2%.<\/p>\n<p style=\"text-align: justify;\">Many experts predict that the test will slow the market, as first time buyers struggle to qualify against stricter borrowing standards.<\/p>\n<p style=\"text-align: justify;\">\u201cWe can expect residential investment to slow down next year after the new restrictive guidelines come into effect,\u201d reads a recent report from Desjardins.<\/p>\n<p style=\"text-align: justify;\">The report predicts that major markets in BC and Ontario will be hit hardest.<\/p>\n<p style=\"text-align: justify;\">\u201cThe recent growth leaders, Ontario and British Columbia, could be particularly hard hit by the expected slowdown in the housing market,\u201d reads the report. \u201cAs we know, Toronto and Vancouver are where the housing market grew so extensively in recent years.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Tight markets won\u2019t be loosening up<\/strong><\/p>\n<p style=\"text-align: justify;\">Despite concerns about rising interest rates and new mortgage rules, it is unlikely that prices will dip too far in Vancouver and Toronto, where demand is high and supply remains relatively low.<\/p>\n<p style=\"text-align: justify;\">Toronto saw its prices balance out in the second half of 2017, after the province introduced its Fair Housing Plan, complete with a foreign buyers tax. However, many experts predict that the effect will be temporary, and may already be starting to fade. BC implemented a foreign buyers tax in the GVA in 2016. Today, prices have returned to pre-tax levels.<\/p>\n<p style=\"text-align: justify;\">\u201cToronto\u2019s prices are down in year-ago terms, and will probably follow the pattern observed in Vancouver where prices are recovering from the immediate aftermath of the foreign buyers tax,\u201d writes Scotiabank VP and head of capital market economics Derek Holt.<\/p>\n<p style=\"text-align: justify;\">CIBC senior economist Benjamin Tal agrees. \u201cWithout dealing with the real fundamental issues facing the GTA, these policy changes are able to provide only temporary relief,\u201d Tal told BuzzBuzzNews. \u201cIf you look at the long term trajectory, and where prices will be, say, 10 years from now, I think they will be increasingly more and more unaffordable to the average Canadian.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2017\/12\/canadian-housing-market-headlines-youre-likely-see-2018.html\" target=\"_blank\" rel=\"noopener\">Canadian Housing Market Headlines You&#8217;re Likely to See in 2018<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Canadian real estate market made headlines plenty of times in 2017 \u2014 but what does next year have in store? Will housing prices and affordability continue to dominate the &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/01\/canadian-housing-market-headlines-to-watch-out-for-in-2018\/\">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-7854","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>Canadian Housing Market Headlines to Watch Out for in 2018 &#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\/canadian-housing-market-headlines-to-watch-out-for-in-2018\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canadian Housing Market Headlines to Watch Out for in 2018 &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The Canadian real estate market made headlines plenty of times in 2017 \u2014 but what does next year have in store? 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