Home prices are expected to see slight gains for the rest of 2014 before dropping slightly next year, according to RBC’s recently released monthly housing market update.
“We project home resales to total just over 461,000 units in Canada in 2014, which would constitute a modest increase of 0.8% from 2013. We expect the moderating trend to lead to a small outright decline of 1.3 per cent in 2015,” the report states. “On the price front, we expect a modest gain of 3.4 per cent in 2014 at the national level, followed by virtually no change (-0.1%) in 2015.”
As for affordability, Canada’s three major markets are expected to become even more attainable once interest rates inevitably increase.
“In the near term, affordability will be strained by home prices outpacing income gains in key markets such as Toronto, Vancouver and Calgary,” the report states. “Later this year and into next, we expect higher interest rates to erode affordability more broadly.”
Overall, 2014 has seen a slow and steady buildup in home sales across the country as the winter months gave way to a busier spring. Brokers can likely expect the trend to continue through the summer.
“The housing story so far this year in Canada is as much about supply as it is about homebuyer demand. Scarcity of ‘quality’ listings this winter limited the choices available to buyers, many of whom consequently opted for the sidelines until more suitable offerings came along,” the report states. “Strong increases in new listings this spring widened the array of buying possibilities and no doubt contributed to fuel the spring season, late as it may have started.”