At the Canadian Mortgage and Housing Corporation (CMHC) conference in Toronto, Ted Tsiakopoulos painted an optimistic picture for Ontario’s housing market in 2014. Here’s what you need to know.
In his 45 minute session, entitled “The rebalancing of growth… and Ontario’s response,” the regional economist described just how the growth in Ontario is expected to change. The performance gap between Western Canada and Central Canada – specifically Ontario – is expected to close; low rates are expected to give way to gradually higher rates; new construction – which has been the primary driver since the recession – will be overtaken by resales and as ownership decreases, rentals are expected to shoot up.
Ontario “can expect more modest pace in growth and prices in the near future,” Tsiakopoulos told the crowd at the conference.
Positive economic factors are expected to bolster the housing community as well.
Ontario businesses are expected to gain confidence in 2013, unemployment will drop year-over-year and less out-migration to western Canada is expected to drive housing in 2014.
The cost of housing is still a matter of concern, however; the affordability gap in Ontario relative to other markets is expected to close slightly.
As for home price growth in Ontario, Tsiakopoulos expects 1.6 per cent growth in 2014 as Ontario remains “in a balanced state.”
For the next few years, baby boomers are expected to be the primary drivers of the Canadian housing market until millenials (echo boomers) – who only accounted for 15 per cent of home buying and renting in 2012 -- take over a major contributor.
“Echo boomers will be on hold over the next five year period,” though their effect on ownership will be felt by 2016.
Tsiakopoulos, however, did share a few concerns with the housing outlook with certain factors; which include China’s growth decelerating at a faster than expected pace and mortgage rates moving higher than originally expected.