There’s no question that Toronto, Calgary, and Vancouver real estate market conditions are getting ‘hotter’. However, in an interview with Financial Post writer Garry Marr, Bank of Montreal chief economist Doug Porter cites that market conditions outside these three major cities leave much to be desired. Porter implores the public to stay calm and let the real estate figures speak for themselves:
Vancouver August sales were up 18% year over year while Toronto and Calgary were up 4.2% and 13.6% respectively. Added together, the three cities are responsible for 33% of all sales in the country this year. However, the dollar value of the trades (sic) year-to-date have so far been worth about 48% of all activity.
“I’m not sure [any] markets are so hot they need dousing,” said the economist. “If you hit the market with something like tighter mortgage rules, that could send some already weak markets into a tailspin. Policy makers are in a tough bind.”
Other economists add that while the current trend might be seen as cause for alarm, there’s a good chance that the major markets will ‘cool off’ in the coming year. In the meantime, buyers can expect the odds to be stacked against them, while sellers are in a position to take advantage of the growing sales. Either of these two groups would benefit from the expertise of real estate professionals like Vancouver Canada Homes who understand market conditions and can inform clients about any changes that could significantly affect their deals.
These experts know that high real estate sales are linked to other factors such as demographics. If a certain city experiences an employment boom, for example, more people are likely to move there, which increases the demand for residential properties and, eventually, home prices.
However, high population growth and income don’t automatically lead to increased market activity as these factors can also be hampered by stricter credit and mortgage standards. Porter fears that if the government enacts such changes, many buyers, especially those with lower incomes, may be discouraged from entering the market.
Foreigners are also eager to get into the Vancouver, BC real estate market, as well as in other cities. In 2012, it was estimated that some foreign investors owned anywhere from 5 to 50 percent of all downtown condos in Vancouver and Toronto, further limiting the available inventory. While sellers had a field day, buyers faced a more congested market.
While some fear the direction the market is headed, Porter says it’s too early to jump to conclusions. Fortunately, buyers and sellers can count on a company like Vancouver Canada Homes for sage advice and help in closing the best property deals fast.
(Source: Outside of Toronto, Vancouver and Calgary, Canada’s housing market is ‘mediocre at best’, Financial Post, September 15, 2014)