Major industry observers are predicting that national home prices will rise by a miniscule median of 1.7% this year, according to a Reuters survey conducted in early September.
This growth rate projection, which was polled from 16 real estate market analysts, was slightly lower than the 1.9% figure in the June edition of the study.
By 2019, prices are expected to increase by another 2.1%, a similar level to that in the previous forecast. This is predicted to be followed by another 2% in 2020, lower than the 2.5% in the June study.
In Toronto, prices are projected to increase by 2% this year, essentially flat from June. However, home prices are forecast to go up by 3% in 2019, up from the 2% projection in the previous survey.
“The [GTA] housing market is back on an uptrend following the B-20 adjustment phase, reflecting a build-up in pent-up demand,” Laurentian Bank chief economist Sebastien Lavoie noted.
Meanwhile, average home prices in Vancouver will drastically slow down to 1.8% this year, less than half the predicted 5.5% in the June survey. Expectations for 2019 have similarly worsened to just 1.7%, down from 3.4% in the previous report.
“In Vancouver, the market takes a longer time to find a new equilibrium path due to the intended measures from the [British Columbia provincial] government to ease overheating pressures,” Lavoie added.
Majority of the respondents to the Reuters survey attributed the impending slowdown to the upward trend in interest rates along with more stringent mortgage rules.
“We are going to see very modest price growth across all markets,” BMO Capital Markets senior economist Robert Kavcic said. “We are seeing Toronto and Vancouver still adjusting to past policy measures and Bank of Canada rate hikes.”
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