Real estate and mortgage statistics are good to know for anyone with a property in Ontario. The information can help in choosing the right mortgage product and you can use these stats to gain some insights to where the market might be headed in the future. The numbers may differ depending on your city and neighborhood but here are some real estate trends that might affect the real estate market in 2017:
1. The Ottawa Real Estate Association which represents close to 100 boards across Canada said that there were 42,473 sales in October 2016, indicating 2% growth of the real estate market. Things look better for 2017 but growth will be gradual and only in some parts. People are turning to more affordable housing and with low vacancy rates rental constructions will certainly increase. Townhouse sales will also increase in 2017 as people look for more affordable housing in Ontario.
2. Political uncertainty caused by the U.S elections coupled with tighter rules on the real estate market are leading to higher interest rates. Nearly two months ago in November, Dominion Bank increased bits rate for a variable-rate mortgage to 2.8% from 2.7% while the Royal Bank of Canada updated their rate on a three-year fixed rate from 2.69% to 2.79%.
3. The actual national average price for homes was up 5.79% compared to a year ago when it was below $481,994. This growth is exhibited in areas like Kitchener, Ottawa and other parts of Ontario where people prefer to live.
4. National real estate sales are projected to reduce by 3.3% in 2017 to register only $518,900 units according to CREA or the Canadian Real Estate Association.
5. According to RBC it recently took 68.8% of median pre-tax income to pay for household costs involved in a detached bungalow. Slower job growth and less affordability could lead to the lower starts in the first quarter.
6. Existing home sales are expected to grow but at a very slow rate. Home prices in Ontario are expected to be between $517,100 and $535,400 in 2017. People want to own homes but the economy isn’t giving them an opportunity to achieve their goals. This is probably why more citizens are turning to more affordable housing in Ontario.
7. There are signs that demand for resale homes will stand up against challenges much better than that of new constructions. Sales are projected to be between 213,000 and 231,500 in 2017, an increase from 224,700 to 233,300 forecast in 2016. North and East Ontario are likely to experience little activity in the real estate sector compared to other parts.
8. Banks slowly increased their interest rates after the real estate rule change in 2016 but the entry of private lenders in 2017 means that the rates will remain significantly low.
9. The single detached sector is likely to become moderate in 2017, ranging between 63,200 and 66,500 units sold. It is thought by some people that increased migration, a stronger US economy and a long period of low-interest rates will result in more activity in the real estate sector.
10. Mortgage interest rates are predicted to rise starting the first quarter of this year. This is probably because of more stringent mortgage rules that took effect in October 2016.
Jonathan January 17th, 2017