Royal LePage: housing market is a bad area to raise quick money
The latest survey shows that sharply rising housing prices and regional extremes reported last year at Canada’s hottest markers may cool down in 2017.
According to the Royal LePage House Price Survey and Market Survey Forces report, the national housing market showed a 13% annual price increase in Q4 of 2016, with an average cost of a property reaching $558,153. It’s the largest year-over-year national price growth in more than ten years. The survey includes information about proprietary property from 53 of Canada’s largest real estate markets.
New mortgage rules are already affecting first-time buyers
New mortgage rules implemented by the government last fall made about half of Ontario’s first-time buyers postpone their purchase.
According to the new stress test, homebuyers who don’t provide a 20% down payment, are obliged to show they can afford payments at the central bank’s benchmark rate, which is 4.64% now.
Because of this tightening only, almost 45% of first-time homebuyers will have to postpone their purchase in order to save up for a larger down payment, says a latest survey made by Ipsos for the Ontario Real Estate Association (OREA).
December 2016 – Canada’s construction sector shows strong activity
Several reports show that last month the number of housing starts in Canada was significantly higher than predicted, and November building permits also exceeded forecasts. It means a real estate boom may be not finished yet.
According to the Canada Mortgage and Housing Corp. (CMHC), housing starts were up by 10.6% in December, outpacing the specialists’ forecasts. Moreover, the increase was reported both in the sector of detached houses and in the sector of apartments or condominiums.
Such gains led to a seasonally adjusted 207,041 units last month, following the revised 187,273 units of November. Earlier, economists surveyed by Reuters, predicted 195,000 units.