RBC Says 2019 Was a Turning Point for Canadian Housing Market

RBC Economics says 2019 will go down as “the turning point for Canada’s housing market.”

This refers to the end of the most significant correction since the Great Recession of the last decade and sets the scene for continued recovery for the housing market 2020.

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, stable labour markets, and steady 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.

In 2020, the housing market should be further supported by an expansion of the first-time homebuyer incentive.

Source: Canadian Real Estate Wealth

Sean Kavanagh 905.220.9198
Leo Manchisi 905.334.9650