The Canadian housing market is showing some positive signs at a national level but not all regions are performing well.
In a report called Canadian Housing: Anatomy of a Correction, CIBC Capital Markets economist Benjamin Tal says that average house prices are rising, sales are trending higher, and inventory is tightening to a level historically consistent with a strong market.
But while the national picture looks positive as 2020 approaches, Tal notes that the regional story is “abnormally divergent.”
For BC, there is improvement with sales at an annualized rate of 85,000 which CIBC economists view as sustainable; and for Alberta is appears that the market may be bottoming out along with Saskatchewan.
There is also good news for Ontario where recovery from the 2017 corrections is complete with a balanced market ahead. Quebec is also expected to remain strong as supply issues maintain prices.
Strong demand and tight supply in Atlantic Canada will also support prices while additional supply should lead to a balanced market ahead.
But Manitoba and Newfoundland are both expected to see some softening of their markets.
Biggest markets not so good for first timers
The report also considers the impact on homebuyers of the correction and recovery of the two largest markets.
In both the GTA and Vancouver, Tal says that the price that first-time homebuyers will pay today is, on average, higher for the same property than it was before the correction.
However, this is not true for existing homeowners. Mover-uppers have seen the gap between the price of their home and that of their target home narrow in recent years.
The full report can be read at https://economics.cibccm.com/