Housing horizon flat, analysts warn
March 11, 2019
Real estate associations and analysts are forecasting a fairly flat 2019 housing market, as the stress test continues to affect all levels of buyers. Slower activity for this year and next even prompted the Canadian Real Estate Association (CREA) to downgrade its forecast once again. CREA is now expecting national home sales to drop 11.2 per cent this year compared to a year earlier—and decline a further 0.5 per cent in 2020.
The downturn will be mostly felt in the Ontario, Newfoundland, and Calgary. It will be especially tough in B.C. and Vancouver, which has absorbed a number of provincial policies and taxes targeting vacation, and speculative and foreign buyers, in addition to the federal stress test.
B.C. will actually experience a “housing recession” over the next three years, according to a report from 1 Credit Union.
However, homebuyers aren’t the only ones to feel the pain. Lenders have seen the number of issued mortgages fall over the last year as a result of slower activity. Canada Mortgage and Housing Corp. recently reported that the number of new mortgages taken out in the second-quarter of 2018 fell to 205,000—a year-over-year decline of 11.9 per cent.