Good news to report, our 2020 forecast is more optimistic than our 2019 forecast. Let us begin by giving you a background on how the Ontario real estate market has preformed over the last 2 years.
In 2018, we had a real estate market that took a dive after the OSFI expanded the mortgage stress test rules on uninsured mortgages. The stress test affects buyers who put a 20% downpayment on a home. Essentially they will need to qualify at a higher rate than the contractual rate, to ensure they will be able to pay their mortgage should borrowing rates go up.
In 2019 the real estate market picked up, mainly due to buyers overcoming the initial shock caused by the stress test. We saw increases in housing starts, sales activity, and prices were up, in some areas prices were up 12% over last year.
We are confident you will see these positive trends continue into the new year. In 2020, the housing market in Ontario should see strong gains fuelled by robust wage growth, continued job growth, and a flood of new immigrants who see Ontario as the desired place to be. In 2019, new comers to the province accounted for 1 in 5 home buyers. Interest rates are likely to hold steady next year, good news for borrowers as interest rates are still relatively low.
CREA (Canadian Real Estate Association) are forecasting home sales for 2020 to reach 530,000 units, which would be an 8.9 increase over 2019. CREA is also predicting average national sale price to increase 6.2% over 2019.
18 economists polled by Reuters are sticking a more moderate tone, forecasting price growth in 2020 to reach 3% over 2019. We predict most of the price, and sales growth to be enjoyed in areas such as Vancouver, Ottawa, Montreal, and the GTA.
Our biggest nemesis for 2020 will be the lack of supply to meet the robust demand.
If you, or someone you know is considering selling, reach out to us on our website, Williams Family Real Estate, or DM on instagram.
We wish you a healthy and prosperous 2020. Toasting the end of a decade, and the beginning of a new one.
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