What’s happening in Canadian Housing Markets?

Over the last few months we’ve received information on where the markets have been for the last few years and where they are going over the next 24 months. Many have pointed out that low rates are here to stay for a while, although I would think not forever, we should comfortably be in the 3% range for some time to come for fixed discounted 5 year rates.

People continue to seek out homes as the prices and affordability still remain at comfortable levels, Canada reportedly has 1.29 Trillion dollars’ worth of mortgage debt which is up 5.4% from last year but down considerably from the growth in 2007. And resale activity continues to show signs of strength although weakened by insurer’s policy changes and the softening employment markets.

Latest CMHC Housing Trend Report

CMHC reported today that they expect a growth of 1.2 and 1.4% in 2016 and 2017 which would indicate a moderate growth pattern. Place like Vancouver, I hate to say this, probably don’t have much upside to their market, I hate to say it because no one seems to really know who is buying all these million dollar homes. I hear mortgage agents talking about 9 million dollar months and even in the hardest months that I worked in Fort McMurray’s boom market have I ever been able to reach that number. Talking with private lenders in Toronto and they say the condo markets are over supplied, one went so far as to say that a condo with 20% equity they considered upside down aka poor investment even at 80% loan to value.

What Does the Future Hold for Housing Mortgage in Canada?

I think it will be on a province by province scenario. BC will continue to move along nicely as Vancouver prices will be continue to be high, lumber is back and so are the buyers of vacation properties in the Okanogan. Stopping tankers on the coast, while a good campaign promise may back fire as the effect on Vancouver harbour is felt and the loss of many jobs associated with those tankers. Alberta will have a couple of tough years not only because of oil but because of an NDP government that wants to shut everything down. Farmers, coal, oil are all on their wish list to change. Saskatchewan will lag as well but their government will be on top of job creation and making sure that the oil industry doesn’t leave.

Manitoba…well Manitoba never changes, they’re the steady eddy of Canada, if you look at the list of the richest neighbourhoods in Canada you’ll find quite a few in Winnipeg. Maybe they’re onto something? Ontario will see some growth but the new federal government will take a couple of years to implement its infrastructure programs and incentives for new manufacturing. Ontario will also have the advantage of low oil prices and a cheap dollar to help with manufacturing exports. Quebec will be Quebec and I’m sure will be well rewarded federally for crushing the orange tide, bless their heart. The Maritimes will see some relief but housing will be, as it always has been, very affordable.

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