Many realtors are predicting that Canada’s real estate boom will be slowing down in 2017, with predictions that the New Year will bring with it modest sales gains compared to years gone by. Even the Canadian Real Estate Association forecasts 2017 as the year when the home market will level off. And while Toronto and Vancouver are still considered “red hot” by any measure, both realtors and bankers seem to be in agreement that changes are coming to the housing market.There have also been pressures placed on the federal government to intervene in some way in the market. The stumbling block is where to intervene. Small down payments can be problematic. Foreign buyers with cash also pose a problem. And finally, a shortage of housing inventory has tis own impact on supply and demand. As for prices, forecasters are predicting a “flattening out” – not any dramatic reduction in record-high house prices, but certainly a halt to the escalation
Then, of course, there’s the issue of residential home affordability. And although the luxury home market has a completely different set of dynamics, it’s the first time homebuyer that seems to be squeezed out of the housing market. Flattening out or not, house prices remain high, seemingly out of reach for many, and especially the young. Perhaps the Bank of Canada has the best long term forecast, warning that an elevated house market, with high prices is simply unsustainable.