Royal LePage predicts 8.5 per cent housing market correction
The Canadian Press
Published Thursday, January 12, 2017 12:20PM PST
TORONTO - The extreme regional disparities that characterized Canada's real estate markets last year will narrow in 2017 as overheated areas cool and slower markets gather steam, Royal LePage says in a report released Thursday.
That trend will be driven by lower prices in Greater Vancouver and strong but moderating price growth in the Greater Toronto Area, the real estate company said.
“The disparity in home price appreciation between Canadian regions has never been greater than that seen in 2016, with rates ranging from double-digit extremes in some cities to negative growth in others,” Phil Soper, president and CEO of Royal LePage, said in a statement.
“In 2017, we anticipate a movement away from the regional extremes of real estate feast and famine - and that is a very good thing.”
Royal LePage's national composite index of prices grew 13 per cent year-over-year to $558,153 in the fourth quarter of last year, the highest increase recorded by the index in more than 10 years. Two-storey homes led the charge, rising 14.3 per cent to $661,730, while the price of a condo was up a more moderate 7.4 per cent to $356,307.
Nationally, home prices are forecast to climb 2.8 per cent this year, Royal LePage said.
In Greater Vancouver, an 8.5 per cent price correction is expected, in spite of the fact that the province's economy is projected to lead the country this year. Even with that decline, home prices would be $1,126,000.
“While the cost of a home in Greater Vancouver will remain the highest in the country, a modest price reset will provide much needed relief in the Lower Mainland and help reignite overall buyer activity in the region,” Soper said.
That contrasts with the outlook for GTA's real estate market, where Soper says there is “no relief in sight” as underlying economic fundamentals remain strong. Prices in the area are expected to hit $793,000, an increase of 10 per cent.