REAL ESTATE MARKET IN CANADA
Real estate business is one of the world leading business with promising income not just for an individual but also for a country. Canada as a country is not left behind in wealth creation by taking advantage of the real estate market. This article will reveal some information on the effect of real estate as a business on Canada as a country.
Real Estate and Canadian Economy
From a reliable analysis, it was proven that about 76% of the Canadian economy is wrapped around real estate. This makes real estate market something that cannot be treated with levity because the fall of the market would lead to a significant decrease in the economy of the country.
Factors Affecting the Real Estate Market in Canada
The increasing interest rate of people on a specific type of property acquisition while putting the location into consideration and the rising interest rate on a mortgage are one of the primary factors that will affect house affordability this 2019. Over thirty-six percent of Canadians show a keen interest in the purchase of their own home in the next five year and over sixty-five percent of Canadians demonstrate an extreme resilience to living in a house close to a cannabis retail store.
There is, however, a strong feeling that the Canadian real estate market would be stable, as the high-interest rate will start becoming obvious to Canadians as they make and proceed with the plans of acquiring landed properties this New Year (2019). It is expected that high interest would affect the ability of Canadians to afford to get a mortgage contrary to the result acquired from the previous survey, which proves that about 31 percent of Canadians are not affected by the increase in the interest rate of a house mortgage. This was detected through a survey carried out by RE/MAX.
Some Cities and Market Performance
A report made it evident that British Columbia housing market is close to a recession that could remain active for over three years without proper measures. According to The Canadian Real Estate Association (CREA), the falling home sales in British Columbia is set to bring down national sales like never before in the history of the real estate market in Canada. From the forecast made by the association after careful analysis of sales in British Columbia from 2017 to 2019. The British Columbia’s market had taken another significant hit of 5.2 percent, which had brought home sales down to about 30 percent of what it was in 2017 when there was an enormous growth of sales over 100,000 units. A reduction in the investment of foreigners into the buying of properties in British Columbia has created a perfect opportunity for buyers in the Greater Vancouver’s Condo market. In Kelowna, the number of sales has dropped significantly by 33 percent. However, the reduction in sales can be associated with the increasing difficulty of Canadians to get themselves an affordable mortgage in that region of Canada and more Canadians might be shifted out of the market with the continuously increasing interest rates.
Areas such as Edmonton are experiencing a reduction in the average residential sales price due to the economic condition of Alberta, which seems to be falling to the negative side. In Calgary, it is expected that the market will remain in a state of equilibrium all through 2019 because the city reliance is on oil and gas industry and mortgage stress test, which is a real estate hindrance.
Winnipeg has shown an increase in average residential sale price on a moderate scale from $315,720 in 2017 to $323,001 in 2018. The prices are expected to keep shooting upward with an anticipated rise/ increase in price rate by just four percent.
Ontario In Ontario, the increasing interest rate and the mortgage stress test has led to a reduction in sales price by four percent from $822.572 to $789,181. Buyers with the interest to enter into the freehold market might find it difficult to do so because of the inability to afford the single-detached segment. This has given the resale condo market the opportunity to control 37 percent of the total residential sales because of the increasing vertical growth due to affordability.