THE GLOBAL AND NATIONAL PICTURE
Posted by John Vernon & Associates on
Canada ranked first with an average inflation adjusted price y/y percentage increase of 16.2%. The top five countries included: Canada, China, Ireland, Australia, and India. Russia, Peru, Brazil, Thailand and Italy experienced a real decrease in house prices. In Canada, residential listings on the Multiple Listing Service (MLS®) in 2017 totalled 878,021, up 2.2% from 859,368 in 2016. Salestotalled 514,437, down -4.0% from a record high of 535,908 in 2016. The value of MLS® residential sales in Canada was $262.5 billion, unchanged from $262.5 billion last year. The sales-to-new-listings ratio (a measure of market strength) was .59, down from .62 in 2016. The average sale price of residential properties in Canada was $510,179 (a new high) in 2017, up +4.1% from $489,871 in 2016. Many Canadian cities enjoyed a year over-year increase in average sale prices. Toronto, Hamilton, Ottawa, Montreal and Victoria experienced above average increases. Greater Vancouver, the Fraser Valley, Hamilton, Ottawa and Victoria enjoyed strong seller’s markets. Most other areas experienced balanced market conditions with relatively modest increases and/or decreases in average prices and sales. Market conditions remained weak in Saskatoon and Newfoundland/Labrador. The Canadian Real Estate Association (CREA) is forecasting that sales and prices will ease somewhat in 2018. Nationally, residential MLS® sales are forecast to decline -5.3% to 486,600 units in 2018 and the average sale price will decrease by -1.4% to about $503,100. The Canada Mortgage and Housing Corporation (CMHC), while highlighting concerns with the markets in Vancouver and Toronto, has a more positive outlook on the real estate market for 2018. It cites the following factors affecting the market: increased growth in the GDP; continued growth in household formation, strong net migration, ongoing demand for new housing; improved employment trends coupled with relatively modest increases in mortgage rates. The CMHC is forecasting stable market conditions with resulting residential MLS® sales of between 485,600 and 504,400 units in 2018 and an average sale price of between $491,900 and $512,100.