With the final numbers tallied for 2016, house price appreciation is expected to narrow in 2017, according to a recent survey of Canada’s residential real estate market.
“Eroding affordability in British Columbia’s Lower Mainland has reached unsustainable ground,” says Phil Soper, president and chief executive of Royal LePage. “This, coupled with public policy measures introduced last year and lower sales volumes, has put visible downward pressure on home prices. While the cost of a home in Greater Vancouver will remain the highest in the country, a modest price reset will provide much needed relief in the Lower Mainland and help reignite overall buyer activity in the region.”
“Unlike Vancouver, where a price correction is underway, there is no relief in sight for the Greater Toronto Area,” he added. “Forward momentum and supporting fundamentals in the region are strong.”
With oil prices stabilizing, new capital spending commitments underway and an energy-friendly administration taking office in the United States, there is a growing sentiment that the worst is over for the Alberta economy. During the fourth quarter of 2016, home prices in the region started on an upward trend, pointing to a resurgence in home prices in 2017.
Economic growth in Saskatchewan is likely to be positive, but slightly below the Canadian average. Home prices are expected to remain relatively flat in the province’s two largest cities.
Manitoba is expected to track closely to national economic growth levels, further supporting the housing sector in the province, which is forecasted to see low single-digit house price appreciation throughout the year.
Ontario’s labour market strength has translated into consumer income growth that supports the rapid expansion of the province’s housing market – particularly in the GTA.
Quebec’s economy showed sound growth in 2016. Success towards eliminating its deficit may result in stimulus spending in the next few years, providing an additional boost for the economy and housing market.
The Maritimes are expected to achieve economic growth throughout the year, along with continued residential housing market gains. This contrasts with Newfoundland and Labrador, which were hit hard by energy price declines last year. It is projected to see further economic and home price declines in 2017.
Nationally, Royal LePage forecasts that the aggregate home price will increase 2.8 per cent in 2017. This is a more moderate increase than the 13 per cent increase seen in the fourth quarter of 2016, which was the highest year-over-year national home price increase in over a decade.
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