According to the Canadian Real Estate Association (CREA), the summer of 2017 delivered the first year-over-year decline in home prices in four years. And this may be a sign of balance returning to housing markets across Canada.
As reported by CREA, the across-the-country decline was only 0.3 per cent, but many believe this downward trend will continue at least into the new year. According to CREA, home sales declined in two-thirds of the Canadian market, including Calgary, Halifax and Ottawa, and the Greater Toronto Area.
As CREA chief economist Gregory Klump says: “Sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case…”
The national news magazine Maclean’s believes that prices will also fall, especially in the single, detached-home market. And, to the relief of many, Maclean’s suggests the days of bidding wars are most likely behind us.
Market watchers attributed the drop in home sales that initially affected Vancouver, and was still impacting Toronto this fall, to recent measures imposed by both provinces designed to cool overheated housing markets.
Also this fall, the Bank of Canada increased the interest rate for the second time in two months – which had the immediate effect of raising mortgage rates. Expectations are that rates will continue to rise. As well, the Office of the Superintendent of Financial Institutions is considering again tightening credit regulations. But industry pushback may put this on hold.
What are buyers and sellers across the country to do? With the usual slowdown in the housing market in fall and winter combined with uncertainty on many fronts, both may be inclined to take a wait-and-see attitude.
Or they may adopt the position of cautious optimism espoused by some experts, who are anticipating calmer, more balanced housing markets across the country with more choice for buyers and sufficient profit for sellers.
After all the instability, this may be news to take action on.