According to the latest RPS - Moody's Analytics House Price Forecast Quarterly Report, the outlook calls for slower appreciation on average over the next two years followed by some recovery.
Industry leaders, RPS Real Property Solutions and Moody's Analytics exclusive quarterly report on the Canadian Housing Market outlines nationwide and region-specific real estate predictions, trends, and scenarios.
In the latest analysis we find:
- Canada’s housing market has slowed substantially as a result of policy interventions. Canadian year-over-year house price growth will be less than 1% on average in 2019, compared to over 7% in 2017 as a result of policy interventions.
- However, an extended house price correction is unlikely due to improving housing affordability and buyers’ good debt service ratios, which are much less likely to deteriorate due to the new borrower stress tests. Thanks to improved long-term confidence, average annualized five-year house price growth for Canada is expected to be 2.8%.
- Toronto and Vancouver will go through short, but significant, house price corrections that will bring their prices in line with long-term trend values. Single-family home prices will fall by 5% in Toronto over the next two years, while prices for single-family homes in Vancouver will fall by the same amount in only one year.
- Some undervalued housing markets, especially in Alberta, will do better despite weaker economic fundamentals precisely because they are less overvalued and have retained better affordability. Montréal currently looks like one of the healthiest housing markets, avoiding both overvaluation and weak economic fundamentals.
Click here for the full report.