The trends indicate that the housing market in Canada is a bit of a hit and a miss – it’s looking good in some parts, and not so good in others. Here are the 5 biggest trends that expect to see in the Canadian property market in 2017.
#1: Toronto will continue to do well, as usual.
The Greater Toronto Area (GTA) has been the best performing housing market in Canada. This region has witnessed massive price increases in double digits for the past few years. One of the biggest reasons for this is the demand/supply mismatch – the demand is too high, while the supply of housing stock is very much limited.
Not enough new homes have been built in recent years to meet the strong demand, coming especially from new immigrants to Canada. Canada is one of the most open and inclusive countries in the world that draws in hundreds of thousands of immigrants every year. There just aren’t enough houses for them. So this is only likely to push property prices in Toronto, the biggest city in Canada, only higher.
#2: Property prices could cool down in Vancouver.
Property prices in Vancouver could cool down substantially in 2017, just as they had in 2016. The reason for this is the new foreign buyer’s tax introduced by the local administration, which could drive away some of the foreign buyers.
That could change fast as well. If the supply continues to remain low and the demand increases in the near future, the property prices here could shoot up. Vancouver is not a financial hub like Toronto, but it is arguably a more beautiful city. So there will always be a lot of foreign investors who will want to buy a home here.
#3: First-time homebuyers will have a hard time because of changes in the mortgage rules.
There are a plenty of properties for sale in Canada available for a good price outside the Toronto and Vancouver regions. There are many reasons for this. The government of Canada has introduced changes to the mortgage rules, which means homebuyers that apply for a new mortgage loan should now pass a “stress test”.
They should also qualify for a mortgage rate posted by the Bank of Canada, which is higher than those offered by other banks. They should deposit a much larger down payment on the property than they used to in the past.
These changes would affect first-time homebuyers more than most, and might cause many of them to put off buying their first home for now.
#4: Property prices in the oil producing regions will continue to remain depressed.
Alberta is an oil producing state in Canada, which has suffered severely because of the fall in oil prices since 2014. Scores of jobs have been lost and several local businesses have shut down. This has also affected the local property market. Prices of properties in Alberta have been down for long. But with the oil prices climbing up steadily so far in 2017, we might yet see a slight revival here.