Growing Optimism Regarding Housing Market Amongst Canadians

Published August 20, 2019 by Real Estate Leads

Earlier this year, the CMHC joined economists and many other industry experts in declaring that the market for detached homes in Canada was now ‘flat’ – meaning that it wasn’t moving in either direction and thus favouring either buyers or sellers OR meaning increased or decreased property values for homeowners.

It would appear that things have changed since then. Have they changed enough to warrant a change in the ‘flat’ condition of the detached home market? That’s up for debate, but of course as well all know there’s much more to the market and housing stock in Canada than just detached, single-family dwellings. Sure, they may be the shining pinnacle of home ownership, but the reality is that the ‘norm’ of what housing and should entail is shifting very rapidly in todays’ world.

Ascribing to and working with these new bigger-picture realities is a part of what separates a great realtor from a good one, and as we keep harping at here – knowledge is real power in this business in much the same way it is for any of them. Here at Real Estate Leads, our online real estate lead generation system is an excellent way for realtors to harness the power of the Internet and get so much more out of their prospecting efforts. And that means opportunities for you to flex your real estate industry knowledge muscles!

Stronger Market Performance Seen

The consensus seen nowadays is that Canadians have an increasingly positive outlook on housing, and that’s something of a marked change from as recently as 2 summers ago. This has been amplified by stronger market performance and an increase in housing starts across the country as a whole.

The Bloomberg Nanos Canadian Confidence Index confirms this, with a posted a 58.6 reading that’s up from the 58.3 seen at the end of June. The increase may seem small at face value, but in this context it’s significant. Vancouver and Toronto continue to be the very centres of real estate activity and demand in the country, and accordingly this growing optimism is being bolstered by surging home sales in Toronto and Vancouver.

Both cities enjoyed 24% growth last month.

National Economy Influences

This is then coupled with a steadily recovering national economy, along with downward movement in borrowing costs. As a result, ever greater numbers of Canadians are less intimidated at the thought of a potential housing downturn.

According to a recent Bloomberg-Nanos survey, 43.2% of respondents believe local real estate prices in their area should increase in the next 6 months. Oppositely, the percentage of those expecting lower prices came in at 15.2%, which was decidedly lower than the 2019 average of 16.4%.

This more positive consumer outlook is buoyed further by higher levels of construction activity or building ‘starts’ as they’re referred to in the industry. Recent CMHC figures indicated that the national trend in housing starts was 208,970 for last month (July), an increase from the 205,765 units that were started in June.

Most notable here were High levels of activity in apartment and row starts in urban centres, and these housing types and the locations of them were integral in reflecting in the high level of the total starts trend in July.

The ‘Smart’ Choice: Multi-Family Development Starts Leading the Way

Vancouver in particular was key to all of this and provided a major boost – upwards of 85% of the market’s new housing starts last month were in the multi-family development category. Of course, these types of developments flourish in environments where available land constraints and supply-demand imbalance that’s drastically weighted towards demand make them the much smarter choice for civic planners and the like.

We can expect to see much more of multi-family home development projects all across Canada, and the trend is definitely something that’s worthwhile for realtors to take note of in being increasingly aware of where the market is going, and the types of housing that will make the most sense for many of their clients.

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