The Canadian housing market experienced several highs and lows during the previous year. It began with a market report of gains hitting up to 30%. Things changed with time after the introduction of tougher mortgage regulations and taxation on foreign buyers which affected the housing prices. Challenges and opportunities are in the Canadian housing sector this year. Different experts have predicted a deceleration in housing prices in the year 2018. There are major lessons players in the Canadian real estate sector learned over the past twelve months. The challenges faced over the past year in the housing markets showed their ability to recover quickly from difficulties.
The regional housing markets portrayed a slightly positive outlook over the past year. Housing prices were high in 11 out of 13 geographical markets. Prices in areas like Vancouver rose up by 14%, Montreal by 6% and Toronto by 8.4%. This year is expected to be different. The general outlook for the Canadian housing market is favorable. Buyers are advised to be timely when it comes to buying new homes in Canada. Waiting for an extended period will leave them in a position where they may end up buying at higher rates. There are several things you need to know about the Canadian housing market in 2018 which include:
Becoming a homeowner in Canada this year might not be an easy task. Those with uninsured mortgages are expected to undergo a stress test. This is in a bid to determine how much mortgage rate increase you can afford. The buying rules can reduce the buying power considerably. With a qualifying rate of 5%, a 20 % deposit and 25-year spreading payments, buying a new home in the Canadian market will not be an easy task.
Condominiums are fast becoming the house of choice in various parts of Canada. Many are opting for this type of housing units in places like Toronto and Vancouver. The price of a home in Canada hit up by 11% in the final quarter of 2017. Condominiums are said to have appreciated faster than any housing type. In 2018, condos remain the preferred housing type.
Rising interest rates
This is another factor that can affect housing prices in 2018. The bank of Canada increased interest rates back in November 2017, which is approximately seven years after the last hike. Mortgage rates are also expected to rise in the coming days and years. The Canadian bank has confidence in the country’s economic outlook however as much as the high rates seem to affect the housing market.