Investor forecast for 2016

The Canadian Real Estate Association has updated its forecast for 2016, with two provinces expected to lead the way.

“Since CREA’s last forecast published in September, housing markets in British Columbia and Ontario have strengthened further,” CREA said in its updated housing forecast. “As a result, CREA has raised sales and average price forecasts for these provinces.”

National sales for the rest of the year have also been revised higher.

Home sales in Ontario are expected to rise by 9.3%, which would be higher if prices in the GTA were more affordable, CREA said.

“British Columbia is projected to post the largest annual increase in sales activity in 2015 (+21.4 per cent), while Alberta (-21.4 per cent), Saskatchewan (-10.8 per cent), and Nova Scotia (-5.1 per cent) will record annual sales declines,” CREA said. “Activity in Manitoba is forecast to rise by 2.3 per cent this year.”

One bit of bad news, however, is that the recently announced mortgage rule changes – which will impact homes costing more than $500,000 – will have a larger reach than intended.

“Recently announced changes to mortgage regulations that take effect early next year risk cooling housing markets beyond Greater Vancouver and the GTA, their intended targets,” CREA said. “In particular, the regulatory changes are also likely to reduce sales activity in Calgary once they take effect in early 2016.”

Despite this, home sales are expected to reach 498,600 next year.

“The national average price is forecast to edge higher by 1.4 per cent to $448,700 in 2016,” CREA said. “Price gains in 2016 are forecast to be strongest in Ontario (+2.9 per cent) due to an ongoing shortage of listings for single family homes coupled with strong demand for them in and around the GTA.”

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  • by MFenn 2015-12-16 11:02:53 AM

    While some people will complain (and of course are entitled to do so) about house prices in Toronto and Vancouver, yet from an investment point of view these areas seem to offer the investor long term patterns. Unless one takes an ultimately irrational 'go away, investors!' stance (politicially bowlderized, no doubt), existing, long term patterns are things that investors are likely to look at, and justifiably so.

  • by SAM 2016-01-02 3:42:16 PM

    I think that the housing story in Metro Vancouver area and Lower Mainland (BC) is very frustrating and sad . It does need real actions from the respective government parties to fix it. I believe that the slight increase in the minimum down-payment for houses over 500 K (which the new government has recently proposed to fix the situation) is just a cosmetic/nominal one and it will not likely cause any significant change to the skyrocketing house prices in these areas (which keep going up day after day).
    For example, we keep hearing about many of the foreign investors who come to Metro Vancouver and buy big houses just to vacation in them for few days or even leave them empty as investment plans for their future . Meanwhile, many hard-working Canadian people, who and their parents were born in Vancouver and work hard all their lives, still can’t afford to buy a house even in a remote suburb of Vancouver.
    Why the government does not pose special conditions on the foreign investors who are willing to buy properties in these areas to help stop this trend (that is basically unfair to Many Canadians), just like many cities in the developed world.
    Also, due to the crazy house prices, many people are having huge mortgages to buy houses that are beyond their financial Capacities, thinking that the interest rate will remain low forever. Unfortunately, once the interest rate becomes significantly higher, many of these people will not be able to comfortably pay their mortgage . Why the Canadian government does not work with the lending banks to educate these people about this important point (explain to them the very possible scenarios of higher interest rate in the near future) and make the lending conditions tougher for such people. This is just to avoid putting these people in financial problems and stresses ( trap ) when the interest rate goes up.
    I think that the respective government authorities should help people avoid having huge debts instead of encouraging them to do so, like many banks who only care about making lots of money .

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