Modest price gains expected in real estate in 2019
Tuesday Jan 08th, 2019
Canadian realtors are predicting modest gains in the Toronto area re-sale housing market in 2019 — a return to a pre-bubble balance that will see home prices climbing in the low single digits.
Royal LePage is expecting a 1.3 per cent price gain to an average of $854,552 next year, including houses and condos, in the Toronto area. That’s a sliver above the company’s 1.2 per cent national forecast.
Re/Max is slightly more optimistic, forecasting a 2 per cent price increase in the Toronto region, compared to the 1.7 per cent Canada-wide. The relative calm is a relief after the turbulence of recent years, said executive vice-president Christopher Alexander. “Buyers are going to be more cautious,” he said. “I think there’s a lot of fear of the unknown. That is going to affect consumer confidence a little bit.”
Royal LePage CEO Phil Soper said 2018 was the first year in two decades when the market actually went backwards but the outcome could have been far worse. “It was the mythical soft landing,” he said. The correction has been tough for mortgage-related businesses and real estate brokerages. But, Soper said, “It was a beautiful thing because the prospect of a difficult and economically dangerous deep correction was looming when we had prices increasing at 30 per cent per annum.”
How good the next year’s market is for buyers and sellers will depend on where they’re located, said Re/Max’s Alexander. Toronto continues to be a hot market, particularly west of Yonge St., but some of the 905 municipalities lowered the average price 4 per cent for the region this year, he said. Re/Max forecasts a better year for some of those in 2019. Oakville could see prices climb as much as 5 per cent after a 12 per cent dip this year. Mississauga and Brampton, which experienced a flat 2018, are anticipated to have 4 per cent price gains. Durham Region could see a 3 per cent increase after a 5 per cent drop in 2018, says the company. Alexander had no figures for York Region, where the market’s recovery has lagged.
Soper suggested that some 905 communities will benefit by demographic trends next year. “We don’t forecast (sales) volumes, but we believe volumes will pick up as the year goes on,” he said. There is a pent-up demand among aging baby boomers for more suitable accommodation, said Soper. As well, millennial condo owners, who are having children, are looking for more space that could put more pressure on suburban houses in 2019. The shortage of listings is also expected to be a challenge in the coming year. That’s because people like to list when the market is frothing, said Soper. They don’t recognize that a lack of competition can be a good thing, he said.