Last year in 2018 we saw many changes to the Canadian housing market. Now that 2019 is here, what will this year bring?
We’re breaking down real estate predictions for the year ahead. Here’s what’s on our radar:
1. Interest Rate Increases
In 2018, we saw Canadian interest rates rise from 1% to 1.75% and more hikes are on the horizon for 2019. Economists speculate we may see interest rates reach 2.25% by 2020.
This may seem small, but it could have a big impact on Canadian household debt. It may change what kinds of houses Canadians are able to afford and how well they can keep up with expenses, like utility payments.
2. Housing Prices
Overall, in 2018, house prices in Canada rose at a slow rate — the slowest since 2009 in some months. The Teranet-National Bank House Price Index has captured all of the data from the past year. Toronto and Vancouver have struggled, but other markets, like Montreal and Ottawa-Gatineau, have recorded larger increases over the past few months.
In 2019, we may see more stabilization, but it will likely take more time before we return to where we were.
3. Dwelling Shifts
With increased interest rates and mortgage stress tests, homebuyers are gravitating towards different dwelling types — in particular condos and multi-family units. Supply for single-family residential homes is tight in major cities.
This may mean that multi-family units continue to rise in popularity. It could also mean that more families seek out different areas to reside in — for example, opting for an affordable small town instead of a bigger urban centre.
4. More Affordable Housing
In 2018, the Ontario Real Estate Association (OREA) joined forces with other agencies to lobby the provincial government for more affordable housing options for millennials. Particularly in Toronto, OREA has said there is a housing crisis.
This conversation is taking place across the country about how to create more affordable housing, especially with home prices on the rise. We expect these talks will continue into 2019.
5. Insurance Premiums May Rise
As of January 1, 2019, new MICAT (mortgage insurer capital adequacy test) guidelines are in effect, which could see default insurance premiums rise.
6. Technology
Digital transformation has been a buzzword for a while, but in 2019 we are entering a new age of real estate technology. On the residential front, this will look like more smart devices in homes — such as voice technology using Amazon’s Alexa or the Google Home
systems. Home buyers may also want to control lighting and other utilities from mobile devices and the like.
On the real estate sales front, more technology also amounts to more opportunities for sales professionals. We may see a surge in paperless real estate, or more automation being included in property evaluation, like aerial imagery from drones or viewing a home through virtual reality (VR).
No matter what changes affect the real estate market in 2019, GeoWarehouse can help you adapt. Our tools are accurate, up-to-date, and easy to access, meaning you’ll be able to stay agile and competitive.
Learn more by calling 1-866-237-5937 or visit www.geowarehouse.ca.
