Expect a slow year for the housing market says RBC economist

The latest home resales data from CREA showed an improvement in January with a 3.6% rise following declines across the fourth quarter of 2018 (cumulatively 4.3%).

But despite some positives, the outlook for 2019 overall is for the Canadian market to remain subdued due to the factors that weakened sales in 2018 continuing.

That’s the message from RBC Economics senior economist Josh Nye whose housing market report points out that the challenges that buyers faced last year, especially the mortgage stress test, higher interest rates, and local policy measures, are all still in place, so things are unlikely to see significant improvement.

January’s data did however halt the decline for month-over-month sales figures for Vancouver, while prices continued lower; Nye says it’s too early to say if the market has found its footing.

Toronto seems to have stabilized and Nye says they are “more balanced than we’ve seen in years.”

Ottawa and Montreal are the “new hotspots” while the energy sector issues continue to dampen sales in Alberta and prices here are still falling.

Overall, Nye says the stats are a positive start to the year but notes the inequality across markets. Nationally, RBC Economics forecasts sales to rise less than 2% from 2018’s five-year low and prices are expected to see only a slight increase.