Home prices are set to be flat for the rest of this year before picking up in 2020. A panel of economists and analysts convened by Reuters says that lower mortgage rates and strong economic conditions will drive prices higher next year.But homeowners and investors hoping for a new Canadian housing boom appear to be out of luck; the panel expects growth to be a modest 1.8% in 2020.
The strong labour market and population growth will be key factors in next year’s price increases. “There are views that the factors are in place for continued recovery, but then again it will be a slow recovery, not a sharp snapback,” RBC’s senior economist Robert Hogue told Reuters.
Tale of two cities
Home prices in Toronto have already picked up and are now predicted to post a 2% gain for 20198 compared to a previous estimate from the panel of 1.3%. However, prices in Vancouver are now expected to post a sharper decline in 2019 than previously thought; the panel believe a 5.5% decrease compared to the 4% they were predicting in May. There will be a modest rebound in 2020.
Demand for housing is expected to rise – 13 of the 17 on the panel said so with three calling for a hold-steady and 1 expecting a decrease.
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