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Although Canada is currently facing economic
hardship, the real estate industry is expected to
stay stable.
Low interest rates and economic job growth
have characterised the current Canadian prop-
erty market, leading toward stabilisation and
a greater ability to maintain slow economic
growth throughout the economic crisis.
These unique attributes have made the Canadian
property market increasingly attractive to over-
seas investors who have been injecting money
into the Canadian real estate market. This inves-
tor attention has created a slow rise in Canadian
home prices, as opposed to other countries where
the real estate industry has remained stagnant.
Mortgage Market
While the central bank has failed to hint whether
they will increase the current base rate of 1%,
people are still concerned by the cost of real
estate versus affordability.
Mortgage rates with ratesupermarket.ca start
at 2.75% which has enabled many first time
homebuyers to jump on the real estate ladder
and enjoy low monthly repayments. With no
base rate changes since September 2010 it will
be interesting to see how 2012 pans out.
Meanwhile, forecasts by The Canadian Real
Estate Association (CREA) estimated that the
national home sales for both 2012 and 2013
will remain in sync with the 10 year average for
annual activity.
Property in the larger cities are typically more
expensive and a closer look into key Canadian
cities uncovers further issues.
Snapshot of Vancouver
• During 2005 to 2010, the compound annual
growth rate in Greater Vancouver was set at
10% while the 20 year average was 6%.
• The average price of both single and multi-
family homes during 2011 was $796,000,
however, the CMHC predicts this average to
rise during 2012 to $800,000.
• 48% of households own their homes in Van-
couver compared to 68% nationally.
Trouble in Toronto - Condominium
Market Subject to Excess Supply
Toronto has seen a 9% increase in condo real estate
pricing in comparison to 2011. This means people
will be increasingly opting to rent. This may sound
like good news for property investors who dominate
an estimated 25% of the market, however, as more
units are listed for sale, price increases are slow-
ing down. It now is only a matter of time before the
market begins to adjust accordingly.
Montreal
The housing marketing in Montreal saw home
resells rise up to 6.9% during the fourth quar-
ter of 2011. However, with a record 47,000 jobs
having been cut, it is feared that both the hous-
ing demand and the conditions of the market
may have negative impact.
The good news is: Montreal is Canada’s second
metropolis and a strong office rebuild market has
meant that it hasn’t been as severely affected by
the economic crisis. According to a study con-
ducted by the Altus Group, Montreal is one of
Canada’s most predictable markets, offering high
returns and more reasonable, stable prices.
Conclusion
While there has been an increase in prices
throughout Vancouver, Toronto and Montreal,
the Canadian property market is forecast to
remain stable throughout the rest of the year.
Canadian Real Estate Forecast For 2012
Money Matters |
Canada Business Review
| April 1, 2012
IN THE NEWS
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T H E C A N A D I A N
HOME INSPECTOR