Fortunately, there is never a dull day in the real estate market. The Canadian real estate market has been no exception. Earlier this year, the Canadian real estate market started off with a whimper. For the better half of this year, the Canadian market has reached a stalemate status.
Today's Canadian Real Estate Market Has Reached A Balanced State
According to the latest statics, the real estate market in Canada appears to be balanced. Toronto and Calgary have reached a balanced territory while Montreal and Vancouver are heading toward a seller's market.
In the latter part of 2017, Canada's housing inventory stood at 4.8 units compared to 4.9 units of housing inventory in the earlier part of 2017. Overall, Canada's long-term average for housing inventory is 4.2 months. Given the current statics, Canada's real estate market's supply equals demand.
Canadian's Home Prices Remain Stabilized
Even though Canada's real estate market has flattened, housing prices are still holding their valve. The national average home price was down to 6.4 percent recently. This average is due to having more condos than detached housing in Canada current housing mix.
Considering the at the current benchmark price for available housing, home valves in Canada rose one percent. CFEA predicts the national average price going up to 3.8 percent in 2019. The market increases are likely to be seen in Ontario, British Columbia, Quebec, New Brunswick, Nova Scotia, and Prince Edward Island markets. The Prairies, Newfoundland, and Labrador areas will probably continue to see more stability in their housing price markets.
The Reasons Behind Canada's Stabilized Housing Prices
Earlier this year, housing sales in Canada dropped 35 percent in Vancouver compared to the same time last year. Compared with the average priced home in Victoria, B.C., the benchmark price is still six times more than the average's family's income before taxes. House prices in these areas continue to rise. Using the Toronto area as an example, home sales are down 20 percent compared to a year ago. However, Toronto's home prices average eight times the typical Candian's household income.
In the current tepid markets of Prairies and Atlantic Canada changes in housing prices remain within the range of 2017 statics.
Economical housing markets are found in Saint John, N.B., Saint John, Nfld., and Regina Sask areas. Lower house pricing is available in the Charlottetown, Saskatoon, Halifax, and Edmonton areas. These housing prices are before the new mortgage regulations kicked in 2019.
The New Mortgage Rules For 2018 And How To Make Them Work For You
The new loan rules will affect around 100,000 homebuyers. These homebuyers will still qualify for a mortgage. However, they will not qualify the same loan amount in 2019.
Under the new regulations, an applicant's mortgage application will use a minimum qualifying rate. This qualifying rate is currently at 4.99 percent. In the majority of cases, a home buyer will be forced into a less expensive home than they could buy in the current year. If a potential homeowner waits until 2019 to buy a home, a larger down payment will be required.
These new rules could mean the average Canadian homeowner looking at homes around 20 percent cheaper. Those homeowners having issues qualifying under the new mortgage laws will have to make a different purchase price than they originally planned.
For those homeowners looking to renew their home mortgages, the lenders do not have to impose the new mortgage regulations. However, in some situations renewing borrowers could be in a position where they could face uncompetitive rates from their current mortgage holder. Also, because of the new mortgage regulations, current homeowners probably will not be able to shop around a better rate.
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