Uncertainty is the adjective to use when describing Canada’s western-most province, according to Royal LePage.
“New government taxation and regulations within the region have also introduced a great deal of uncertainty into the market, as purchasers have begun to take a wait-and-see approach, putting downward pressure on sales activity,” Royal LePage said in its Q3 forecast. “While this did not significantly impact year-over-year home prices during the third quarter, it could very well result in a more balanced market moving forward.”
“The majority of economic forecasters watching the province have predicted that the Alberta economy will contract by approximately two percentage points in 2016, making it one of the most significant downturns in the province’s history,” Royal LePage said. “The economic drop in the region has directly impacted housing prices in the province’s key markets, however, not nearly to the degree many observers anticipated.”
Despite this, Royal LePage suggests Alberta has already been through the worst of the market decline, and it could all be up from here.
“Effects can be observed in the employment sector, as the province lost 6,500 jobs in September when compared to the same period in 2015. Employment insurance recipients are up, earnings are falling and payroll employment is down,” the brokerage said. “Despite the traditionally negative effects of a poor economy on the housing market, the region’s home prices have remained relatively stable; aggregate house prices in Regina increased year-over-year by 0.6 per cent to $332,540.”
Manitoba’s economy is holding strong, according to the agency.
“This is favouring well with the housing marketing in Winnipeg, as the aggregate price of a home in the region increased 2.3 per cent year-over-year to $291,426,”Royal LePage said. “Forecasting strong population increases for the coming years, the City of Winnipeg announced recently that it projects it will exceed the one-million resident mark by 2035 and that demand for housing will grow as a result.”
Following British Columbia’s lead, Ontario is poised to continue to be one of the country’s fastest growing economies.
And housing appreciation is the major trend on all industry payers’ minds.
“In the Greater Toronto Area, house values continue to climb. Aggregate house prices in Toronto grew year-over-year by 12.1 per cent to $714,002,” according to the brokerage. “House prices in surrounding region Kitchener/Waterloo/Cambridge are also appreciating, posting a year-over-year increase in aggregate house price of 9.1 per cent to $371,474.
“Hamilton, which stands above the provincial average in retaining and attracting millennials, had year-over-year growth in its aggregate house price of 10.3 per cent to $419,830. The aggregate house price in Ottawa saw moderate year-over-year growth of 3.6 per cent to $411,654.”
Export volumes may be down, but the economy in La belle province remains steady.
It’s ahead of its economic targets, according to a number of reports, and its unemployment level is below the national average.
“These factors remained supportive of the residential housing sector in the third quarter, with the aggregate house price in the Greater Montreal Area increasing by 4.9 per cent year-over-year to $352,798,” the brokerage said.
The major concern out east is the possibility of a recession, as the flagging oil industry continues to take its hits.
And it’s not just due to declining oil prices; with many of the area’s working-age citizens relying on work in that field, fewer prospects mean more struggle.
“As a result, St. John’s was the only city studied in the Royal LePage Composite to decline in Atlantic Canada, with the aggregate home price dropping -3.2 per cent to $332,597 year-over-year,” Royal LePage said. “Meanwhile, Moncton and Halifax showed slight year-over-year increases in aggregate house prices of 1.5 per cent to $182,529 and 0.8 per cent to $308,017, respectively. Similarly, aggregate house prices in Charlottetown and Fredericton increased year-over-year by 2.3 per cent to $224,219 and 2.9 per cent to $246,696, respectively.”
One of the country’s largest brokerages has released a province-by-province forecast. What does the future hold for each housing market?