“Employment is high, rates are low, and home prices are essentially flat. 2019 is shaping up to be a year of rare opportunities” – Phil Sopher, President and CEO, Royal LePage
With one month of 2019 in the books, changes have already been happening in the Canadian Real Estate market this year. The Canadian Real Estate market is constantly changing with the supply and demand needed for today’s buyers and sellers. If you are thinking of making moves in the 2019 market, here is some information you might find helpful when buying or selling this year:
What did home sales in the Real Estate Market look like in 2018?
Knowing what happened in the previous year and the previous quarter is important when trying to determine what might happen in the following quarters. At the beginning of 2019, Royal LePage released their House Price Survey which stated that healthy gains were made throughout Canada, especially in the fourth quarter of 2018. This is great news for buyers and sellers as the market is continuing to recover from the most significant housing correction since the financial crisis. According to the survey, “the price of a home in Canada increased 4.0 per cent year-over-year to $631,223 in the fourth quarter of 2018.” During the end of the fourth quarter, the Greater Toronto Area saw healthy home appreciation. Condominiums continued to see the highest rate of appreciation nationally when compared to the detached segment, rising 7.2 per cent year-over-year to $447,915.
Bank of Canada Announcement – January 2019
On January 9th, the Bank of Canada announced that there would be no change to their overnight rate, meaning that variable rate mortgages, lines of credit, and/or student loans that are based on the Bank’s Prime Rate will stay the same. But what does this mean for you as a homeowner or potential homeowner?
“Those with a variable rate mortgage can take a sigh of relief for now. The Bank of Canada held its overnight rate at their January 9th meeting. Many Economists expect there will be a slower pace on rate hikes and that spring to mid-year will be the more likely timing,” said Michelle Campbell, a local mortgage broker.
Campbell continued, “Although the 5-year bond yield would suggest a decrease in fixed rates, that hasn’t happened. The variable rates are almost 90% lower than fixed rates, depending on if you are purchasing, renewing or refinancing. CMHC reported that 31% of insured buyers chose a variable rate mortgage in the third quarter of 2018. Features of a variable rate mortgage include the ability to lock into a fixed rate at any time without a penalty, a 3-month interest penalty to break the mortgage before the term is up as well as the qualifying interest rate being much lower than that of a fixed rate.”
“With fixed rates holding steady, a variable rate mortgage is still a very attractive option,” concluded Campbell.
Expect to have more interest rates announcements in 2019. The announcement dates for this year are as followed: March 6, April 24, May 29, July 10, September 4, October 30, and December 4.
What are the predictions for the 2019 Housing Market?
Although in real estate nothing is ever certain, there are still projections made each year as well as each quarter. Phil Sopher, president and CEO, Royal LePage stated, “Canada’s real estate market is beginning to emerge from the correction that began a year ago. The national real estate market is stable and should see modest price gains by the end of 2019.”
Although house prices and home sale volumes were soft and low last year, you can expect modestly better results in 2019 according to Sopher. It is projected that the modest home price appreciation to rise 1.2 per cent in Canada in 2019, which means if you looking to enter the real estate market, the time is now.
“A silver lining in this cloud of uncertainty is the opportunity for young families to enter the market,” said Sopher.
For more information on the Canadian Real Estate market and the projections for 2019, please contact one our agents or mortgage brokers today.