The raft of new measures introduced in the latest federal budget will likely keep Canadian housing sales at moderate levels until fall 2019, according to the Royal Bank of Canada.
Among the highlights of these measures is the substantial assistance towards first-time home buyers, which will involve the Canada Mortgage and Housing Corporation shoulder up to 10% of the cost of a new home, or up to 5% of a resale.
RBC Capital Markets senior economist Robert Hogue noted that as a result, a significant proportion of Canadians might just wait for the measures to take effect on fall, so that they can maximize their potential savings.
“First-time home buyer activity is poised to slow down between now and September 2019, as many house-hunting millennials await more details and crunch their numbers.” Hogue wrote in his research note earlier this week, as quoted by BNN Bloomberg. “This could depress the market even further during that period.”
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This possible slowdown would occur on top of already debilitated home sales volume, which saw a 9.1% nationwide decline last month to reach its lowest levels since 2012.
A fortunate implication of these trends is that Canadian housing sales would likely enjoy a massive recovery just before the federal election, once the new measures are activated.
“Any delayed purchases will fuel stronger activity in the fall,” Hogue said.