2019 was a turning point for Canadian housing market says RBC

by Steve Randall on 18 Nov 2019

As the end of 2019 approaches, RBC Economics says the year will go down as “the turning point for Canada’s housing market.”

This refers to the end of the biggest correction since the Great Recession of the last decade and sets the scene for continued recovery for the housing market in the coming year.

The report from senior economist Robert Hogue reflects on a year that faced challenges but also saw a return to more normal conditions with buyer demand rising, inventory tightening, and prices rising.

He notes that sales in October were 7.3% above the 10-year average and prices increased 1.8% year-over-year as the pace increased over the past four months.

Referring to supply issues, his report highlights thin inventories in Ottawa, Montreal, and Halifax; and tightening inventory in Toronto and Vancouver.

But despite some challenges, he writes that the market is in better shape than it was at the start of 2019 with low mortgage rates, solid labour markets, and strong population growth all supportive.

However, the Prairies remain pressured by economic conditions with sales and prices lagging.

Outlook for 2020
Looking ahead for 2020, Hogue says that – outside of the Prairies – demand is at more normal levels and prices, while rising, are doing so at a moderate pace.

That said, affordability remains a concern in Toronto and Vancouver, although there has been some improvement in 2019.

Next year, the housing market should be further supported by any expansion of the first-time homebuyer incentive.

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