A report from Mortgage Professionals Canada notes that since 2000, house prices in Canada have tripled on average, growing twice as quickly as incomes. (In Greater Vancouver, house prices have quadrupled.)
To cover the difference, Canadians have taken on increasingly large amounts of debt, which today sit near record levels.
The Vancouver Sun reports that almost half of Canada’s baby boomers – ages 54 to 72 – plan to downsize (17% within the next 5 years), and 42% will consider a condo for their next home; 37% would be willing to move to a more affordable location. Many would prefer to go into a townhouse but not enough are available, or suitable (stairs, storage, etc.).
No empty nest
The Huffington Post reports that 23% of all boomer households still have at least one child living at home. Of those, 9% countrywide – but an astonishing 24% in BC – expect their kids to stay home past 35 years old.
Population growth is the fastest in the G7
A Bank of Montreal economics report says that Canada’s population growth (the fastest in the G7) is driving demand for housing. Our population grew by about 506,000 people (including 380,000 immigrants) in the 12 months ending June 2018, bringing our total population past 37,000,000. The report says the increased population will help maintain housing prices, but may also lead to increased economic activity and thus higher interest rates.
Metro Vancouver Average Sale Prices
Following an almost uninterrupted 20-year rise (most dramatic in the last 4 or 5 years) prices in all categories have leveled off or fallen somewhat.
Detached houses, which enjoyed the largest gains, have also shown the largest drop – but as the graph shows, the change to date looks to be more of a leveling off than a sharp drop.
Tighter mortgage rules, taxes aimed at discouraging foreign buyers, and economic uncertainty from the US are among the factors applying downward price pressures.
But increasing population, limited supply, relatively low mortgage rates, and a lot of built-up equity are working to support prices.
As always, the market is trending differently in different neighbourhoods and at different price points – so contact me for details and trends relevant to you