{"id":9434,"date":"2018-06-11T08:08:06","date_gmt":"2018-06-11T15:08:06","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9434"},"modified":"2018-06-09T08:17:41","modified_gmt":"2018-06-09T15:17:41","slug":"what-to-expect-from-the-canadian-housing-market-in-the-2nd-half-of-2018","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/06\/what-to-expect-from-the-canadian-housing-market-in-the-2nd-half-of-2018\/","title":{"rendered":"What to Expect from The Canadian Housing Market in the 2nd Half of 2018"},"content":{"rendered":"<p style=\"text-align: justify;\">The Canadian housing market certainly got off to a cooler start in 2018 than many had predicted. Home sales and prices have continued to drop on a year-over-year basis, leaving many economists predicting that the market will be adjusting to regulatory changes for months to come.<\/p>\n<p style=\"text-align: justify;\">When will things start to heat up again? No one knows for sure, but some experts have ideas as to why it\u2019s taking so long. BuzzBuzzNews has rounded up the latest commentary, to give you a sense of what the rest of the year has in store.<\/p>\n<p style=\"text-align: justify;\"><strong>The mortgage stress test isn\u2019t playing around<\/strong><\/p>\n<p style=\"text-align: justify;\">While industry watchers had initially predicted that the market would adjust to the new mortgage stress test after the first quarter of 2018, that no longer seems to be the case.<\/p>\n<p style=\"text-align: justify;\">\u201cIt increasingly looks like the new stress test is causing more than just a temporary dip in housing market activity in the greater Toronto and Vancouver areas,\u201d wrote RBC senior economist Robert Hogue earlier this week.<\/p>\n<p style=\"text-align: justify;\">Sales were down 22.2% and 35.1% year-over-year in Toronto and Vancouver, respectively, in May. The numbers are a reflection of the harsher mortgage qualification rules and foreign buyer taxes in both cities.<\/p>\n<p style=\"text-align: justify;\">\u201cMay 2017 was when activity really started to nosedive in the Toronto area following the introduction of Ontario\u2019s Fair Housing Plan in late-April,\u201d writes Hogue. \u201cIn Vancouver, market-cooling measures announced in the 2018 provincial budget in February also likely weighed on May resales.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Higher interest rates will weigh things down<\/strong><\/p>\n<p style=\"text-align: justify;\">But it\u2019s not just the mortgage stress test that\u2019s putting downward pressure on the market. According to the Bank of Canada\u2019s (BoC) Financial System Review, rising interest rates have also had a role to play.<\/p>\n<p style=\"text-align: justify;\">\u201cThe two main vulnerabilities we have been watching closely are showing continued signs of easing, which is encouraging,\u201d wrote BoC Governor Stephen Poloz, in the review.<\/p>\n<p style=\"text-align: justify;\">Historically high Canadian household debt levels and housing prices have both fallen over the past few months, after the BoC hiked the overnight rate to 1.25% in January.<\/p>\n<p style=\"text-align: justify;\">\u201cGrowth in residential mortgages and home equity lines of credit slowed in the first four months of the year, in line with weaker home sales and slower house price growth,\u201d reads the review. \u201cThe pace of other consumer borrowing, which makes up the remaining 15% of outstanding household debt, has also slowed.\u201d<\/p>\n<p style=\"text-align: justify;\">The Bank is expected to hike the overnight rate at least once more before the end of the year, which will only increase the pressure on the already slumping market.<\/p>\n<p style=\"text-align: justify;\"><strong>Canada may slip further in global rankings<\/strong><\/p>\n<p style=\"text-align: justify;\">The new mortgage rules and higher interest rates are both being blamed for Canada\u2019s recent drop in Knight Frank\u2019s first quarter real estate price growth ranking.<\/p>\n<p style=\"text-align: justify;\">In Q4 2017 the country held 10th spot, but in Q1 2018 it\u2019s fallen to number 15, as its price growth slows to a 6.6% 12-month change and a 6-month 1.1% drop. In Q4 2017, the country\u2019s 12-month price growth was 8.9%, with a 6-month drop of 1.3%.<\/p>\n<p style=\"text-align: justify;\">Austria, Hungary, Slovenia, Latvia and the Czech Republic have all surpassed Canada in the ranking in the last three months.<\/p>\n<p style=\"text-align: justify;\">\u201cEurope\u2019s recovery is now well-underway, closer analysis confirms 11 of the 15 strongest-performing housing markets globally were in Europe at the end of March 2018,\u201d reads the ranking.<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2018\/06\/heres-expect-canadian-housing-market-second-half-2018.html\" target=\"_blank\" rel=\"noopener\">Here&#8217;s What to Expect from The Canadian Housing Market in the Second Half of 2018<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Canadian housing market certainly got off to a cooler start in 2018 than many had predicted. Home sales and prices have continued to drop on a year-over-year basis, leaving &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/what-to-expect-from-the-canadian-housing-market-in-the-2nd-half-of-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-9434","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>What to Expect from The Canadian Housing Market in the 2nd Half of 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=\"http:\/\/www.roryc.ca\/blog\/2018\/06\/what-to-expect-from-the-canadian-housing-market-in-the-2nd-half-of-2018\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"What to Expect from The Canadian Housing Market in the 2nd Half of 2018 &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The Canadian housing market certainly got off to a cooler start in 2018 than many had predicted. 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