While the word two or three months ago was that the Canadian Housing Market was set to slow down at some point in 2017, the question now is, are housing experts still conveying the same story now that we are only a few days away from the first of the year?
If you, like many others have been very hesitant to even attempt to try to enter onto the proper ladder, especially if bad credit and debt are two potential financial realities for you, then it will be important to read on and learn more about where housing forecasters see the housing market going in 2017.
Ultimately, many Canadians are likely to be asking themselves the question, ‘will it be more affordable to buy a home in 2017?
For starters, while homes have been overvalued across the country, with astronomical pricing found particularly in Toronto and Vancouver, other provinces especially in the west to central Canada rank relatively high as well. For the last two years, housing prices have been on the rise, with a huge surge as recent as May being noted in various regions, such as the Ottawa area.
While homes have recently been overvalued at approximately 20 – 30%, especially in Vancouver, the federal government has sought to take steps such as the foreign buyers tax, to counter these prices, which many Canadians agree are far too high to even consider buying a new home.
With that being said, the sale of homes across the country has begun to slow down, perhaps due to the fact that many Canadians are reluctant to sell their homes now as they 1) don’t know if they can afford to purchase a more expensive home, and 2) do not necessarily want to sell their home as 2017 home prices are potentially set to go down in value.
Now getting back to the question of whether homes across Canada will be more affordable in 2017, the answer does appear to depend on who you ask – and here is why.
Jumping ahead now to December, there of course, have been more predictions made about when the housing market will actually decline as well as to what extent it will slow.
Some of the main 2017 Housing Market Forecasts to take into account, begin with the predictions for the current largest markets in Canada – Toronto and Vancouver as they tend dictate the average national value.
Some of the main financial institutions, such as RBC and the real estate group REMAX, predict that this will depend on the region. For example, they predict that while Vancouver and Toronto are unlikely to slow any further, with another 2 percent increase in 2017. Across the prairie provinces like Edmonton, Saskatchewan and Regina however, their prices are more likely to remain about the same for the better part of the next year.
One suggested reason given for these continually high prices has to do with the fact that owning a home remains a major life goal for many Canadians – and this of course only gives more fuel to the strength of the housing market as the demand is still there.
On the other hand however, it is forecasted that the number of home sales may decrease over the course of the upcoming year. Some possible reason for this include, an increase in fixed rate mortgages, which are expected to remain stable until perhaps 2018, as well as the changes that have made to the amount required for down payments on homes above the $500,000 mark. Since homes across Canada are typically valued well above this price, this then means home buyers will need to ensure they can afford these payments. All in all however, perhaps this reality may deter home buyers further.
To really help answer the question of whether or not you will actually be more successful in buying a home in 2017, here we can take a closer look at the amount of income required to buy a home in various parts of the country.
Again beginning with the highest valued areas, in Toronto, you are looking at an average annual income level of $126,000, and in Vancouver and Victoria you will need to earn $99,000 – $152,000. While other cities, such as Regina, Saskatoon, Winnipeg and Montreal range from $58,000 and upwards of about $70,000, and Ottawa still sits a bit higher at $76,000.
Alberta prices also vary, although are still higher than their prairie neighbours. In order to afford to buy a home in Edmonton or Calgary, you are also looking at $74,000 to around $79,000. Now moving over to the maritimes, we do see lower, perhaps more realistically-priced homes – where homes on average are valued at $280,000 – $156,000 and typically require annual incomes of $37,000 – $59,000 only.
Ultimately however, it is important to note that while these prices may go down somewhat in 2017, current forecasts overall do not generally reveal much of a drastic change from what has been seen in 2016.
That being said, if you really want to determined whether or not homes will be more affordable for you in 2017, taking a look at the prices from region to region is also highly recommended. In the end, each potential home buyer will need to assess their own finances, as well as take into account relevant information such as interest rates, down payments, and of course housing market projections for their region as well as the Canadian averages as a whole.