Predicting how markets will perform in the future is notoriously difficult. But still, regardless of their accuracy, predictions can indicate market sentiment – the way people are feeling about a market.
So what are people feeling about Canada’s real estate market. The good news is that there are no predictions of a market crash. Canada’s housing market in general is expected to cool in 2019 with lower price increases than previous years.
Ontario’s average housing price is expected to increase by 3.3% over 2019 – close the rate of inflation.
The bank of Canada is expected to increase interest rates in 2019 to somewhere in the range of 2.25 and 2.75 percent. This will increase the cost of mortgages for many Canadians and new buyers especially.
Over all, we can expect prices to be relatively flat. The potential for a crash is limited by the fact that housing supply is limited in the GTA. The US housing crash that occurred in 2008 was partially due to overbuilding housing where it wasn’t needed.
High rental costs are also a sign that a housing crash is not expected.
The stagnation in housing prices (and maybe rental prices) might create some time for household incomes to catch up.
All in all, we could see the emergence of a buyers market in 2019.