{"id":9575,"date":"2018-07-02T10:10:22","date_gmt":"2018-07-02T17:10:22","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9575"},"modified":"2018-06-23T07:29:33","modified_gmt":"2018-06-23T14:29:33","slug":"it-could-be-a-long-road-to-recovery-for-the-canadian-housing-market","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/07\/it-could-be-a-long-road-to-recovery-for-the-canadian-housing-market\/","title":{"rendered":"It Could Be A Long Road to Recovery for The Canadian Housing Market"},"content":{"rendered":"<p style=\"text-align: justify;\">While many industry experts predicted that the Canadian housing market would start to warm up in May, sales and prices have remained stubbornly flat, as the effect of a new mortgage stress test continues to make itself felt.<\/p>\n<p style=\"text-align: justify;\">So when can Canadians expect the market to finally adjust to the new policy? This week, economists wrote that the volatile market won\u2019t be adjusting this summer, but that there are some benefits to be had from the current situation.<\/p>\n<p style=\"text-align: justify;\">For a closer look at what was being said about the housing market this week, BuzzBuzzNews has rounded up the latest industry commentary, to keep you in the know.<\/p>\n<p style=\"text-align: justify;\"><strong>Homebuyers have taken a \u201cpass\u201d on the spring season<\/strong><\/p>\n<p style=\"text-align: justify;\">That\u2019s the verdict of RBC senior economist Robert Hogue, who noted that Canadian home resales fell to a six-month low in May, with just 436,500 seasonally adjusted units sold.<\/p>\n<p style=\"text-align: justify;\">\u201cWe held the view until now that the transitory effect of the stress test implemented on January 1 would start to wane by the spring,\u201d he writes. \u201cWell, there was no indication of any material rebound in home resale activity through May.\u201d<\/p>\n<p style=\"text-align: justify;\">Hogue blames new mortgage rules, higher interest rates and an expansion of Vancouver\u2019s foreign buyer tax for the market\u2019s poor performance.<\/p>\n<p style=\"text-align: justify;\">\u201cClearly, [these factors] continue to keep homebuyers on the sidelines,\u201d he writes. \u201cNot even a material rise in new listings (up 5.1%) enticed them back into play.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>Volatility has become acute<\/strong><\/p>\n<p style=\"text-align: justify;\">Not to be outdone, TD Economics wrote that Canadian housing market volatility has become \u201cacute\u201d since the end of 2017, in a note released this week.<\/p>\n<p style=\"text-align: justify;\">\u201cRegulatory changes at both the national and provincial level (especially in BC) resulted in outsized swings in resale activity,\u201d they write.<\/p>\n<p style=\"text-align: justify;\">The changes have led to a 44% quarter-over-quarter drop in home sales from Q4 2017 to Q1 2018, and a 7% decline in residential investment, despite what the TD team calls \u201csolid construction and renovation activity.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>But now could be the time to rethink some housing policies<\/strong><\/p>\n<p style=\"text-align: justify;\">\u201c[Slump housing activity] is actually good news as both Vancouver and Toronto desperately need a breather,\u201d wrote CIBC senior economist Benjamin Tal earlier this week. \u201cBut what is being done during that time-out will be crucial for the future trajectory of housing \u2014 and here we zoom in on the Ontario market in general, and the GTA market in particular.\u201d<\/p>\n<p style=\"text-align: justify;\">There are several housing policies that could be reconsidered during the current housing adjustment, according to Tal. Chief among them is Ontario\u2019s rental control legislation, which came into effect last April. The policy has been widely condemned by economists and developers, who believe it will discourage the construction of much-needed purpose-built rental housing.<\/p>\n<p style=\"text-align: justify;\">Currently, landlords are only allowed to raise rent in line with inflation. Allowing for an annual increase of 2% could spur developers to create more rental properties, writes Tal.<\/p>\n<p style=\"text-align: justify;\">\u201cMany developers will tell you that the celerity of such policy and the extra 2% would, in many cases, make the difference between going ahead or not, with a new project,\u201d he writes. \u201cThat simple move could go a long way to ease the current supply pressure facing the GTA housing market.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2018\/06\/long-road-recovery-canadian-housing-market-heres-experts-saying.html\" target=\"_blank\" rel=\"noopener\">It Could Be A Long Road to Recovery for The Canadian Housing Market<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While many industry experts predicted that the Canadian housing market would start to warm up in May, sales and prices have remained stubbornly flat, as the effect of a new &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/07\/it-could-be-a-long-road-to-recovery-for-the-canadian-housing-market\/\">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-9575","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>It Could Be A Long Road to Recovery for The Canadian Housing Market &#8226; 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