November 7, 2018
The Quinte Region has seen a reduction in the homes sold in 2018 versus 2017. As of the end of October 2018 there has been a 20% reduction in the number of homes sold during the same period in 2017.
The Canada Mortgage and Housing Corporation (CMHC) seems to reflect a similar outlook going forward in 2019 and 2020. The following is an excerpt from a CMHC article published November 6, 2018.
Canada Mortgage and Housing Corp. says the country’s real estate market is expected to moderate over the next two years as the growth in housing prices begins to slow to be more in line with economic fundamentals.
In its 2018 housing market outlook released Tuesday, the national housing agency projects housing starts and sales are both expected to decline in 2019 and 2020.
“Housing starts are expected to decline from the higher levels we’ve seen recently. We expect resales in 2019 and 2020 to remain below recent peaks, while prices should reach levels that are more in line with economic fundamentals such as income, job and populations growth.”
The agency expects the number of single-detached housing starts to decrease due to a number of factors including the availability of lot sizes, housing prices and higher borrowing costs.
Rising mortgage rates are also expected to affect housing demand and the resale market.
Slower employment and GDP growth, as well as gradually increasing mortgage rates, will restrain the increase in demand for existing homes by 2020,” said the report. “As demand moves to lower levels relative to new supply, market conditions are expected to ease.”
It also warned that Canadian households remain vulnerable due to heavy debt loads.
“If interest rates or unemployment rates were to rise more than expected, heavily indebted households could face greater constraints on their consumption leading to downward pressure on the economy and housing activity,” CMHC said.