RBC has just released our latest housing market commentary entitled " Canada’s housing market ended 2018 on a weak note ".
Highlights of the report:
- Resales slumped back to a six-year low in December: Most local markets were still dealing with a case of the blues last month in the face of higher interest rates and earlier tightening of mortgage lending rules. Resales fell for a fourth-straight time by 2.5% nation-wide—entirely rolling back the mini-rally that took place in the summer.
- Vancouver is in full-blown correction mode: Under downward pressure since the start of 2018, activity in the area has plummeted by 18% since October. Buyers are in command and prices are declining. The benchmark price fell sequentially for a sixth-consecutive month, generating the biggest drop (-6.5%) over that period since 2008.
- Toronto market was stable in December: Both home resales and the aggregate benchmark price were unchanged. The rate of price increase accelerated marginally to 3.0% y/y from 2.7% in November.
- Sellers wanted in Ottawa and Montreal: Properties for sale have been short of strong demand for a while now and a drop in new listings further tightened things up in December. This latest decline may have been a factor holding activity back in both areas last month.
- Adjustment period to extend well into 2019 and possibly beyond: Renewed market softness in the last couple of months clearly highlight the challenges that higher interest rates, the mortgage stress test and local housing policy measures in BC pose to homebuyers. We see little that would lift this cloud in the near term. We expect only marginal gains in both resales and prices overall in Canada over the coming year.
Below is the link to the full report.
Andrew Brown l Mortgage Specialist l RBC Royal Bank l Royal Bank of Canada l 43 Conlin Rd E, Oshawa, ON, L1H 7K4 l Cell (905) 706-8226 l Visit CallAndrew.com