Canadian Housing Market Outlook- A Report by RE/MAX
Canadian Housing Market – Residential sale price to increase by 5% in the GTA
Canadian Housing Market Outlook Report 2016, RE/MAX is forecasting further growth in the the average Canadian home sale prices. In 2015, a high demand and low supply continued to dominate Vancouver’s and Toronto’s residential real estate. Competition from buyers over limited single-family home inventory pushed prices higher.
This contributed towards an average residential sale price increase by 17% in Greater Vancouver, and 10% in the Greater Toronto Area. The average sale price of a home in Greater Vancouver was $947,350 as compared to $622,150 in the GTA. As demand shows no signs of declining in 2016, these markets are expected to move up. We are expecting to see growth in prices of about 7% in Greater Vancouver and 5% in the GTA in 2016.
New Canadians and foreign investors continued to be an important segment of buyers in Toronto, Vancouver and also Montreal. With Canada’s stable economy and the current low value of the Canadian dollar, this trend is expected to continue through the year 2016. However, regions or cities like Edmonton and Calgary, which rely on oil, might see a small dip.
According to Gurinder Sandhu, RE/MAX’s CFO,“While we expect to see some home price decreases, particularly in regions that rely on the oil and natural resource sectors, strong demand in Canada’s urban centres is expected to continue throughout next year.”
High demand & low supply of single-family homes will continue to drive Canadian housing market.
The report pegs the average national home price growth at 2.5% for 2016. With the growth projections of GTA and Vancouver, the average homes prices are expected to increase to $653,258 for the GTA and $1,013,665 for Greater Vancouver.
GTA remained a seller’s market throughout 2015. The record sales year is expected to end with sales up approximately eight per cent over 2014; there were 89,071 sales between January and October 2015, compared with 81,974 during the same period the previous year.
Move-up buyers continued to drive the GTA market, and single-family homes remained in high demand and low supply. The average price for a single-family home in the GTA was $804,079 as of October 31. The GTA’s average residential sale price is expected to increase driven by continued low inventory for single-family homes and low interest rates. 2015 also noted a “spillover effect from the price increases ” in regions surrounding the hot markets. RE/MAX expects this trend to continue in 2016, with price appreciation in Barrie, Hamilton, Burlington projected considerably above the national average.
Canadian Housing Market – Outlook for Toronto
Affordability pushes first-time buyers to purchase a condo in Toronto. If they are willing to live outside the city’s core, and commute into the city for work, they may purchase a semi-detached or townhouse in Mississauga, or a fully-detached home in Brampton. However, as prices all over the GTA continue to rise, buyers are looking further out. Areas north of the city, like Keswick, are becoming high in demand.
Construction of new buildings has slowed, and a lot of existing condos are fast being absorbed. Price increase for homes has outpaced condos, making it difficult for condo owners to move up. Many of these “move-up” buyers have been selling their city condos and moving to single-family homes in the suburbs.
High-end or luxury homes continued to sell well in 2015, thanks to local buyers wanting to upgrade, as well as foreign buyers, especially from China and the Middle East. A number of luxury condo projects are currently under development which will attract retirees and empty-nesters looking to downsize without sacrificing their lifestyle. These projects are expected to complete over the next two to three years, which might result in an increase in higher-end freehold inventory, as these downsizers put their houses for sale.
Canadian Housing Market – Outlook for Mississauga
In the high demand neighbourhoods of Mississauga, sellers are receiving multiple offers on homes, which would rarely happen a couple of years ago. In Erin Mills and Lisgar neighbourhoods, multiple offers are now most common. The average sale price for a home in Mississauga is approximately $545,700, up nearly eight percent from the 2014 average of $506,818.
Move-up buyers typically purchase a detached home in the $800,000 range, and are among the biggest drivers of Mississauga market. First-time buyers like newcomers to Canada, or families from Toronto purchase a townhouse or semi-detached in the $500,000 range, or a condo in the $300,000 to $400,000 range.
Luxury buyers in Mississauga often purchase renovated, custom-built or newly-built 3,500 to 5,000 sq ft homes on large lots in high-end areas such as Mineola and Lorne Park.
Mississaugans are highly optimistic about the new mayor, Bonnie Crombie, and the city’s plan to revitalize the downtown core. The average residential sale price is expected to increase five to six per cent in 2016. You can find more information on the downtown condo core of Mississauga, in my personal Square One Update 2016.
Canadian Housing Market – Outlook for Brampton
Brampton is a highly multicultural and comparatively affordable suburb in the GTA. It remains a popular choice with first-time and move-up buyers. The average residential sale price in 2015 was $488,300, which is about 10% over the previous year.
There is good selection of both freehold homes and condos in Brampton. Some developments are geared toward retirees, with facilities like bus service to local shopping and events. Brampton’s proximity to Toronto and Pearson International Airport, good highway connectivity and affordability makes this suburb attractive to buyers.
Canadian Housing Market – Outlook for Oakville
Oakville homes saw an 18% increase in sales in 2015 over the previous year. Buyers were quick to pounce of the newly built inventory in Oakville. The average sale price was close to $840,000. Growing families moving up from smaller homes in Mississauga and other areas of the GTA drive the hosuing demand in Oakville.
Luxury homes have been in high demand this year, with fewer days on market. Again, there have been more foreign buyers, particularly in the $1.6 to $2.4 million range. In 2016, the average residential sale price is expected to increase by 5%.