The waning of Vancouver and the waxing of Toronto

Demand for Canada’s residential property is definitely not slowing down any time soon, but this hunger will be less apparent in Vancouver this year, a new analysis from Altus Group warned.

Last year proved to be less than stellar for Vancouver as it experienced a “remarkably constrained” supply of new homes. This trend will most likely last well into 2019, as the market is “exhibiting the most potential for downside risk,” Altus stated.

Taking into account increasing borrowing costs and higher construction costs, Vancouver will likely slow down in terms of sales this year.

“A key challenge that has become more apparent as of late in Vancouver has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates,” Altus said.

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Meanwhile, Toronto will enjoy a major boost from increased immigration numbers along with healthy population growth rates.

“Markets in the Greater Golden Horseshoe, including the GTA, have the most upside potential for an increase in sales activity in 2019 given the depth of the decline in 2018 and building off of the sales recovery noted in the back half of 2018,” Altus explained in its outlook for this year.

Ontario’s markets outside the GTA, particularly Kitchener-Waterloo, will also continue to see housing strength. Condo affordability will carry over from last year, which will help attract more hopeful home owners.

All of these are expected to offset Ontario’s relatively subdued 2018, in which the market cooled noticeably due to B-20 and new development charges.

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