The 2008 financial crash and the introduction of the 15% Foreign Buyer’s Tax caused noticeable dips in the price of housing, but the graph shows these dips were recovered quite quickly. Sale prices for Detached houses have been the most volatile in the last couple of years while the sale price of Townhouses are still showing significant strength.
Changes in the MLS home price index – March 2018
| Property Type | 1 Month | 6 Month | 1 Year |
|---|---|---|---|
| Residential – all types | 1.1 | 4.5 | 16.1 |
| Detached | 0.4 | -0.5 | 7.4 |
| Townhouse | 2.0 | 6.2 | 17.7 |
| Apartment | 1.6 | 9.1 | 26.2 |
The two 35-year graphs compare mortgage rates (five year posted rate, the top graph) to average real estate prices (the lower graphs). Unsurprisingly, when lending rates are low, prices rise.
Real Estate Prices and Historical Posted 5-year Mortgage Rates
It remains to be seen if the current regime of rules, regulations and taxes will affect the market over the long term, or if other forces will prevail.
Bank authorities seem hesitant to raise lending rates too quickly, given the global economic uncertainty.
Things have never been more complex or more dynamic.
Contact me for the best advice and current trends.
