For some time we’ve heard that while the Canadian housing market is flat, the market itself and the value homeowners have in their homes in relation to it have been perched precariously over the last little while for a number of different reasons. It goes without saying that there are many people and livelihoods that have a vested interest in the well being of the housing market, and of course realtors like you are certainly one of them.
It’s for this reason that no matter where and how your interest in the health of the housing market is found, it’s good news these days as the Canada Mortgage and Housing Corporation (CMHC) is saying it no longer has the country’s housing market being ‘highly vulnerable’ after an overall easing of price acceleration has been seen across the country.
While that isn’t going to necessarily equate more homes being sold, it will mean a greater number of prospective homebuyers being further empowered within the overall sphere of business, and that bodes well for a realtor’s prospecting efforts as he or she seeks to drum up more business for themselves. Here at Real Estate Leads, our online real estate lead generation system is an excellent way to get more out of your efforts in this regard, and it comes highly recommended from many real estate agents who are already onboard.
Moderate Market Now
The CHMC’s report from Thursday of last week states that it rates the overall market at ‘moderate’ after 10 consecutive quarters of being rated ‘highly vulnerable.’This with the disclaimer that some cities remain at an elevated risk. A spokesperson said “the state of the national housing market has improved to moderate vulnerability.”
The consensus is that though moderate evidence of overvaluation continues for Canada as a whole, improved overall alignment between house prices and housing market fundamentals has been seen as of late.
The inflation-adjusted average price for a home in Canada went down 5.4% in the last quarter of 2018 from the same period in the year previous.
Vancouver Remains Vulnerable
The CMHC also reported that while house prices in Vancouver, Toronto, Victoria, and Hamilton moved towards more market sustainability, a high degree of vulnerability was still being seen in those markets. Further, Vancouver remains highly vulnerable, and in particular in response to overvaluation of homes there.
The largest cities in the Prairies are staying at a moderate degree of vulnerability. Ottawa, Montreal, Halifax, St. John’s, Quebec City, and Moncton are all seeing little to no risk of vulnerability.
The report determined vulnerability via several criteria; price acceleration, overvaluation, overbuilding, overheating, and others.
Relatedly, price acceleration has eased nationally, and in large part because of the federal government’s mortgage stress test regulations of 2018. They raised the bar as to what’s required to be able to qualify for a mortgage, and the entirety of tighter mortgage rules made for less demand for housing, as well as contributing to the seen decline of house prices.
The report concluded by noting that inflation resulted in personal disposable income dropping by 1.2 per cent, and this corresponding with a reduction in buying power. This was partially offset by a young-adult population that increased by 1.9 per cent and added to the pool of would-be (hopeful) first-time homebuyers by a small amount.
Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads delivered to you exclusively and for your similarly-exclusive region of any city or town in Canada. It’s a nearly guaranteed way to be put in touch with genuine people who are genuinely looking to buy or sell a home in the area of the country where you hang your professional hat. Try it out, and we’re certain you’ll quickly come to see it as money well spent when it comes to advancing your real estate business.
