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What to Expect from the Canadian Housing Market in 2017

Will the Canadian housing market explosion continue into 2017, or will it finally see its end?

Toronto, ON – 5th December, 2016 – The booming housing market has been on every Canadian’s mind for the past two years. Will 2017 be the year that we see it crash? What should real estate agencies and home builders expect from home buyers in the new year? BluEnt has taken a look at the facts to provide some insight into this national phenomenon.

Understanding the Problem

The Canadian Real Estate Association found that the average Canadian house price in July 2016 was $480,743, up significantly from the $437,430 price tag from the year before. By contrast, Statistics Canada revealed that the average Canadian salary increased by less than 2% from $52,790 to $53,747 in 2015 to 2016.

So how did prices continue to rise? In 2015, both the federal and provincial governments have implemented changes to slow down the housing markets through actions like updated minimum down payment regulations and taxes on foreign homebuyers, which has been a particularly relevant source of purchasing activity in Vancouver. However, these actions have been reserved to say the least.

The reason for this is that the Canadian housing market has been one of the few resilient industries to thrive in the current economic climate. In an interview with Moneysense, chief economist at Mortgage Professionals Canada Will Dunning stated that "deliberately cooling the market is a dangerous tactic. Housing interacts very powerfully with our GDP and we could do immense damage to the broader economy by trying to cool specific markets."

He went on explain that controlling demand is not the root of the issue. "We don't have excessive demand, because units are being absorbed. We have a lack of supply problem and that won't be addressed by rate changes or mortgage regulations." Email UsKnow more about us or request a callback from our executive: cad@bluentcad.ca
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Looking to the Future

According to Emerging Trends in Real Estate, a recent study by PricewaterhouseCoopers (PwC), the significant increase in immigration over the next five years will maintain high levels of demand and put more pressure on affordability until more supply becomes available. Given that the vast majority of Canadian home builders continue to be held subject to municipal red tape and extensive approval processes, expanding supply and lowering costs will be no easy feat.

And finally, for the biggest investment question: house, condominium, or rental? As evidenced above, the prices of single-family homes are currently far outpacing wage growth. PwC expects the high mortgage-to-income ratios in hot markets like Toronto and Vancouver to remain well above the national average in the coming year.

The lack of single-family residential unit supply is expected to create an opportunity for condominium and rental markets to absorb the excess demand of those unable to afford home ownership. The study also forecasts the demand for condos to increase in Toronto and Vancouver due to factors such as urban migration and domestic and foreign real estate investors.

However, this will not be the case for other Canadian regions. Montreal, for example, currently faces an oversupply in the condominium market, while affordable house prices and land supply have encouraged growth in the single-family home growth and stalled that of condominiums.

In short, it doesn’t look like the Canadian housing market will be crashing any time soon. The economic and social factors driving its growth continue to be a real national problem, and only time will tell how it resolves itself in the end.

BluEnt's Response

BluEnt provides CAD, BIM and 3D Rendering services for homebuilders, architectural firms, and real estate developers across Canada. In this explosive time in the nation’s building industry, we are committed to giving our clients the competitive advantage they need to thrive.

Given that escalating costs will be a concern for home builders in 2017, BluEnt will continue to ensure maximum quality in our construction estimation and CAD takeoff services. Using takeoff software, we employ various techniques in recording construction quantities to support building professionals. By providing the accurate material and quantity take offs, consultants and contractors are able to estimate a construction project with utmost precision. Our experienced team assists you throughout the process to not only calculate but control the costs involved in your project.

About BluEnt
Headquartered in Toronto, ON, U.S., BluEntCAD is specialized in outsourcing millwork, shop drawings, architectural design and drafting solutions including – BIM construction documentation, CAD services, AutoCAD to Revit conversion, and BIM consulting services with accolades in U.S., UK, New Zealand, Australia and APAC region.

For more information on our company and services, visit www.bluentcad.ca.

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Email: cad@bluentcad.ca

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If you would like more information about the topic, please contact Ava Smith +1 647 478 5230 or email at cad@bluentcad.ca
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