Whether Canada’s real estate market will crash in 2017 or not is a big question that can only be answered by looking at the latest reports and the unfolding events in the Canadian property market. Already, there are a few areas that are experiencing decline in sales while there are others that are experiencing price gains. Dueast Condos
Note that low interests rates and regulations that allow investors to easily access mortgage financing have attracted more people into the real estate market, a thing that has increased the supply of houses. However, this does not show that we are likely to experience a crash any sooner. For a crash to occur, the market must experience a drop in demand and a quick rise in interest rates.
According to Canadian Real estate Association sales are likely to drop by 3.3% in 2017 compared to other years. This is because of deteriorating affordability and the tightened mortgage regulations.
A decline in sales activity in 2017 is expected to prompt a decline in prices because of the reduced demand. However, most of the homes in Ontario are not expected to experience a decline in prices due to low supply of houses in that area. For instance, it is becoming quite difficult to find single detached homes in the wider GTA area. This is why house owners in the areas around Niagara, Halton, Hamilton, Durham, York and Peel are expected to experience a strong demand, which will translate into higher prices.
Areas such as British Columbia are expected to experience a great drop in prices as well as reduced number of transactions. Other areas such as Vancouver have already experienced a drop in sales and listings. Perhaps the tighter mortgage regulations introduced in 2016 play a critical role in reducing the number of buyers specifically those who are buying property for the first time.
Mortgage rates are expected to rise in 2017. This will slow and moderate the market a little bit. According to the latest report by a Canadian based rating agency (DBRS), the rising home value has pushed citizens to a record level of net worth. The agency believes that if the Canadian market crashed, the existing homeowners will not be badly affected. This means that equity ratios for most households would remain strong despite the crash. However, most homeowners will be expected to tackle the biggest debt because of the increasing mortgage rate.
How Home Owners Will Be Affected
Generally, the slowdown and the tighter mortgage regulations will reduce the number of people who qualify for mortgage. The pricier market will be badly hit because already there is a severe shortage of lower priced listings. Inflation and economic policy will also have an impact on housing. If you are a buyer in the Canadian market, you will have more options to choose from. It is for this reason that you need to register and buy a unit at Icona condos. All you need is $200,000 to guarantee you a unit at the condos located in an area anticipated to become the next Toronto’s downtown.