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2017 Real Estate Market Trends for Canadian Buyers and Sellers

28 February 2017,
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Majority of home sellers and buyers worry about the real estate market. Will home prices go up in 2017 or will there be a decline in sales activity and prices?

Based on reports of the Canadian Real Estate Association (CREA), there is an expected drop in national home sales in 2017 compared to last year.  In B.C. and Ontario, the market is expected to remain strong but may fall short because of deteriorating affordability, tightened mortgage regulations, and a shortage of affordable listings for single family homes.

In fact, analysis reports predict a flattening out of home prices in most Canadian markets. But there’s good news…

Some areas are expected to continue to have price gains, such as in Quebec, Alberta, Manitoba, and New Brunswick.

Whether you are looking to buy or sell a house in 2017, you’ll be interested to know market conditions.

 

Here is a look at top 5 factors that could impact home sale prices in Canada in 2017.

  1. US Federal Reserve Interest Rates

Canadian and US Central Banks work independently but US rates have a huge effect on Canadian mortgage rates.

Mortgage lenders are largely influenced by global bond rates set in New York. Home buyers won’t get lower rates if lenders can earn more in safe bonds.

There have been announcements that rates could go up 3 more times in 2017.  Canadians can expect mortgage rates to be a bit more expensive this year.

  1. The Canadian Economy

As long as Canadians believe that real estate prices will remain strong, even a slight increase in interest rates won’t deter buyers.  But a weaker Canadian economy plus higher rates could result in a   downward trend and make domestic buyers put off buying a property.

Analysts predict rising manufacturing and resurgence in oil and gas.  Canadian growth was predicted to stay at 2% by the Center for Economics and Business Research, with the country slipping from 10th to 12th place.

  1. Foreign Buyers

Many remain skeptical of the impact of foreign buyers on the country’s real estate market.  However, a sudden decline of outside buyers could slow down the market.  Millions of wealthy, middle-class investors especially from China have given a boost to Canadian real estate.  China has not stopped the flow of money outside the country as wealthy Chinese continue to look for safe havens for the Chinese currency.  Let’s hope it stays that way.

  1. Construction

To date, there has been no shortage of real estate developments in Canada’s top cities.  But affordability has become an issue in the country’s priciest cities such as Vancouver and Toronto.  Analysts continue to watch carefully if construction and demand stay in place.

  1. Government Regulation

The housing market can also be affected by how government reacts to changes in real estate prices. Sudden changes in rules, such as tax rules in certain cities, can result in distortions in house prices.

Tighter mortgage regulations were introduced in 2016 which could reduce the number of first-time buyers who qualify for financing.  This is true especially in expensive markets where lower-priced listings fall short.

 

IS QUEBEC A BUYERS OR SELLERS MARKET IN 2017?

You may have heard the phrase “buyers’ market” or “sellers’ market”.  What do they mean exactly?

In a buyers’ market, there are more properties than there are potential buyers.  In this scenario, buyers can be very choosy and as a result, home sellers may be forced to lower their sale prices.

In contrast, a sellers’ market means there are more potential buyers than houses for sale.  This gives home sellers the advantage as they can increase their price because of increased demand.

Since 2005, fewer single-detached houses have been constructed in the Quebec CMA.  This downward trend is a result of various factors such as high cost of land, intensification, and more choices in terms of existing properties over the last few years.

Market conditions continue to remain stable and no dramatic changes are expected in 2017.  Condominium sales continue to rise from 2016, with CMHC estimating about 400 more new condos to be available for sale in Quebec City.

As new listings and demand are expected to rise only slightly, the supply of houses for sale will increase.  This market condition may be favorable to buyers, particularly for single-houses and plexes.  Prices for condominiums are also expected to drop, becoming more favorable to buyers in this segment.

Now may just be the perfect time to go house-hunting for first time buyers or those looking for investment properties.

 

Hot Tips for Home Sellers and Buyers

As we move into the latter part of the decade, home ownership continues to be a practical, long term savings plan.

Rising home prices have also pushed record levels for net worth of Canadians in terms of disposable income.

Here are some hot tips to adjust to this year’s real estate market conditions.

  1. Get your starter home now.

For first time home buyers, now may be a great time to move from urban rentals to starters in desirable areas.  Half of home sales in 2017 are expected to be first time buyers, with the millennial set getting a taste of ownership.

  1. Sellers must hire the right real estate agent.

One of the most important steps a home seller can take is to research real estate agents.  If you hire the wrong one, it could cost you months of waiting and tens of thousands of dollars.

Narrow you search for the best agent to 3 and interview them in person, if possible.  Never agree to a listing contract longer than 90 days as you can always extend.

  1. Buyers must study the best financing options out there.

Even before you have found your dream home, you need to consider your mortgage options.  Do you get an open or closed mortgage, fixed or variable interest rates?  You can study your amortization schedule with easy calculation tools online to see how much you can afford.  It is also best to pre-qualify for financing before you start your home search so you are ready to make an offer for your dream home.


  1. Home sellers need to boost buyer interest by:
  • Doing light makeover than serious renovation
  • Keeping the property clean, clean, clean
  • De-cluttering and de-personalizing.

These 3 simple tips can save you a lot of money. Avoid unnecessary improvements that you can’t recoup. De-clutter and remove personalized touches that make it difficult for buyers to visualize themselves living in your home.

  1. For renters, it may be time to move into your own home.

In majority of cases, rents rise faster than home value although mortgage rates are low.  There are many tools you can use to check buy versus rent calculators to see which option is more affordable.

  1. Never underestimate curb appeal.

Is your grass green? Surveys show that home prices can increase by 10% or more with curb appeal.  Greener grass is a must.  You may work hard on the interior of your home but don’t forget the outside.

Whether you are looking to sell your house or wanting to find your first home, it is ideal to work with an experienced real estate agent.

For sellers, you’ll want to get an expert who can get the highest price for your property.  For home buyers, you want someone who is able to recommend the best properties for viewing and negotiate the price on your behalf.

You can start your search for the best real estate agent when you compare 3 real estate agents from our network of qualified real estate professionals.

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