Owning a place in Vancouver is becoming a dream for average Canadians after this longest boom in real estate history of the city and recent changes in mortgage rules. “What will happen to real estate market after January 2018? Are prices coming down?”

Realtors and mortgage professionals are asked this question so many times in a day. As professionals, we try our best to answer their concerns based on what they want to do and what is their future plan. This is hard to predict what exactly the market will be like after January 2018, but one thing is for sure that market will be shifting towards stability.

Based on law of demand supply, it is so easy to predict that housing needs are not met yet, looking at the massive numbers of immigrants and students coming to Canada. Most of these students will be looking to buy houses after completing their studies and immigration process. Home prices will likely continue to increase until we see more housing supply coming on to the market

As per CIBC report Vancouver and Toronto house prices set for rise. The housing markets in Toronto and Vancouver could resume their previous upward trajectories amid conditions of tight supply and burgeoning demand. The Canadian housing market, in general, is in an important transition period — especially Vancouver and Toronto, economist Benjamin Tal said in the report, which was released Tuesday. He said activity is likely to stabilize and perhaps soften in the coming quarters as markets adjust to recent and upcoming regulatory changes, including tougher rules for getting a mortgage.

“But when the fog clears it will become evident that the longterm trajectory of the market will show even tighter conditions,” Tal said. “The supply issues facing centres such as Toronto and Vancouver will worsen and demand is routinely understated.”

“Short of a significant change in housing policies and preferences, there is nothing in the pipeline to alleviate the pressure,’ he wrote.

As prices shot up dramatically in the Vancouver and Toronto areas, governments took steps to try to cool the markets.

Vancouver saw the August 2016 introduction of a 15 per cent tax on purchases by foreign buyers. Tal pointed that following a period of adjustment, a recovery in the Vancouver market is now underway. Huge Demand In his report, Tal said the recently introduced tighter lending rules will only slow demand by five to seven per cent this year, owing to a combination of the “creative imagination” of borrowers, some exceptions to the rule and increased activity among alternative lenders.

At the same time, Tal said that actual demand in the housing market is stronger than official estimates. He pointed out that Canada’s annual immigration quota is slated to rise from 250,000 to 300,000, and eventually 450,000. That comes amid a current tight land supply based on rules that don’t capture the changes in the market, he said. Despite efforts by government and regulators to curb Metro Vancouver’s hot housing market, new home prices have continued to climb in the past year.

In the end, looking at the trend of market I have to repeat the popular quote in real estate- Don’t wait to buy real.

 

 

 Nav Khela