Royal LePage Canada’s national housing survey has labeled 2017 as “The Year of the Condo”
According to the recently released Royal LePage House Price Survey, the residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017.
Major Market Breakdown
- 2-storey and bungalow home values softened in the GTA
- Greater Vancouver and GTA, condo prices continued to outpace all other property types
Average Prices Across Canada
- median price of a two-storey home rose 11.1 per cent year-over-year to $741,924
- median price of a bungalow climbed 7.1 per cent to $522,963.
Why “The Year Of The Condo”?
Phil Soper, predisnet and CEO of Royal Lepage offered the following comments: “To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability. This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations.
Historically, condos have appreciated at a slower pace than detached homes, simply because supply constraints are easier to address, building upward uses much less precious land. For now, demand for those relatively affordable spots in the sky is so high that the trend has been reversed. As builders respond, new projects will come on-stream and condominium price increases will moderate somewhat. However, without hesitation, we can say Canada is now a condo nation, like other advanced economies around the world.”
What Impact Will New Mortgage Rules Have?
Royal LePage anticipates that the new mortage rules, which took effect on January 1, 2018 and require borrowers to withstand a more stringent “stress test”, will slow the housing market in the first half of the year. It is expected that many potential home buyers will adjust their expectations and take a “wait and see” approach.
Phil Soper offered the following comments: “The unsustainably high rates of home price appreciation witnessed in recent years in B.C. and Ontario were dangerous to the stability of not only the housing market, but to the broader economy itself. Policy measures like the OSFI stress test will quell runaway housing inflation to an extent. However, we do foresee an upswing in demand in the latter portion of the year, as prospective buyers adjust to the new realities. To put it another way, the demand is still there. The demand for new housing, be it for purchase or rent, is going nowhere but up.”
Market Predictions For 2018
Royal LePage predicts
- The price of a home in Canada will increase 4.9 per cent by the end of 2018
- Greater Montreal Area increase 5.5%
- Greater Toronto Area increase 6.8% and
- Greater Vancouver increase 5.2%
- Calgary will slow to 2.3%
- Regina will slow to 0.7%
- Edmonton will decrease 1.5%
- Halifax will increase 2.5%
- Ottawa will increase 3.2%
- Winnipeg will increase 4%
About the Royal LePage House Price Survey
The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation’s largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of close to 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence.