Slow growth is in the forecast for 2019, with Canadian realtors predicting Toronto real estate prices will increase next year.
In their 2019 Housing Market Outlook report, RE/MAX forecasted a 2 per cent price increase for Toronto and a 1.7 per cent increase across the country.
In the past year, the Toronto market was heavily influenced by the mortgage stress test and rising interest rates. According to the regional report, overall sales were down 16 per cent and the single-detached home market fell short, but condo and townhome sales remain strong, closing the price gap between freeholds and townhomes.
Home sales for properties priced below $1 million are projected to remain strong in 2019. However, the forecast for homes exceeding $1.5 million is much weaker.
“Buyers are going to be more cautious,” RE/MAX executive vice-president Christopher Alexander said. “I think there’s a lot of fear of the unknown. That is going to affect consumer confidence a little bit.”
Royal LePage also predicts home prices will rise in the GTA next year—though their numbers are a little more modest. According to the Royal LePage Market Survey Forecast, Toronto real estate prices are expected to increase by 1.3 per cent by the end of 2019. On a national level, Royal LePage is predicting a 1.2 per cent increase bringing the median price of a home to $638,257. In the GTA, the median home price is closer to $854,500.
Chris Slightham, broker and owner at Royal LePage Signature Realty says this is good news for the GTA housing market. “Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” he said.
Phil Soper, President and CEO of Royal LePage agrees, noting the market is correcting its self. “The Canadian housing market in 2019 will remain in the correctional cycle that began in 2018, where price gains and sales activity are below the long-term norm, after a few years of uncomfortably high major market price increases,” he said in a statement.
Though the future of Canadian housing looks bright, Soper says low housing supply will continue to be an issue in the years to come.
The lack of housing—let alone affordable housing—in the GTA has reached crisis levels with the city’s vacancy rates at a historic low of 0.5 per cent.