News reports have illustrated the slowdown in sales on the Canadian west coast, statistics from the Canadian Real Estate Association have shown that sales have plunged, and benchmark prices are down 6.5% since six months ago. On the eastern coast, Toronto also saw sales fall sharply, but by half as much as Vancouver and with prices in Canada’s biggest city little changed in recent months. This change in market atmosphere has transformed the Canadian market from the “seller market” status it experienced in 2017 to a mild buyer’s market.
Looking at the broader marget regions, the pressure has been most evident in the Lower Mainland-Southwest and Vancouver Island, as well as the Central Okanagan. On the other hand, Northern B.C., the Kootenay, and other parts of the southern interior have experienced a milder effect.
While it may appear to be a good time to buy, market research analysts are looking at the Canada’s mild housing recession with caution; the market is expected to continue with subdued home sales and flat home values through 2021. The drag is in large parts attributed to the federal B-20 mortgage ‘stress-tests’ government policies. In large urban areas the price corrections in markets are expected be modest given their policy-driven nature instead of economic conditions. Apartment and condominium home-types sales have suffered the worse, attributed to tightening credit conditions for entry level buyers
Keith Knutsson of Integrale Advisors commented, “investors need to be careful about entering the market in response to a price drop because of an aged vision of the market.”