Housing markets in Toronto and Vancouver are heading in opposite directions but a prominent real estate executive believes that the downward turn for Vancouver may not last.
Royal Le Page president and CEO Phil Soper has given his assessment of the market as his brokerage releases its latest House price Survey. The figures show a 12.6 per cent year-over-year gain for house prices nationwide in the first quarter of 2017 to $574,575.
The two hottest housing markets are in focus, particularly for their differing trajectories.
“For the first time in several years, real estate markets in Vancouver and Toronto are headed in opposite directions,” said Soper. “The Vancouver market stalled, as confused consumers took to the sidelines after a series of uncoordinated moves by all three levels of government. With the housing shortage becoming more acute, Toronto easily stepped forward to assume the title of Canada’s most overheated real estate market.”
But while sales have dropped in Vancouver, and RLP’s data shows a 40 per cent decline in activity in the Lower Mainland, Soper says that those who chose not to sell their homes when the foreign buyer tax was introduced, may now go ahead.
“There is now reason to believe that the market correction underway in Vancouver may be short-lived,” said Soper. “The reality is that as much as 90 per cent of the housing activity that disappeared overnight in the Lower Mainland after the tax was introduced was from Canadian residents, not foreign investors. Homebuyers are waking up to this reality and may be ready to rush back into the market.”
For Toronto, Soper says the co-operation between federal and provincial governments is a good thing and that hasty regulations could cause a sharp correction in the market.
Elsewhere, he says the market is balancing with Alberta looking brighter and Quebec emerging as one of the healthiest housing markets in Canada.
Despite risks to the economy, including global factors, Soper says that the Canadian housing market is healthier than it has been for years but concluded: “Our concerns with the state of Canadian real estate begin and end with Toronto and Vancouver.”
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