Following the release of its 2017 real estate report, REP spoke to the Royal LePage head about what’s in store for Canadian real estate.
REP: Toronto is unquestionably the hottest market right now. Do you consider it the new Vancouver?
Soper: For a couple reasons, no. Firstly, Toronto is much bigger. If you look at the number of transactions and the size of the GTA and the variety of places to live and varying prices, there’s a lot more ability to accommodate and be flexible in Toronto.
Number two, it’s quite dramatically more affordable. In the Royal LePage composite, you’re looking at an aggregate price in Vancouver of $1.2 million and $700,000 in Toronto. Those are different universes of affordability because peoples’ income are not drastically different in those cities.
REP: What overall impact will mortgage rules have?
Soper: I was a fan of this set of rules in that they closed some necessary tax loopholes, they got our housing agency and mortgage insurance crown corp. focused on what they should focus on: Helping young people into homes and yet they were significant enough to actually slow the market.
I know some people in the industry, including some of my own people, felt they were too big a move and that they were harming the market in places like Calgary, but that doesn’t pass the smell test for me. If the demand isn’t there -- just because you have to put a little more down in buying a house -- if you aren’t interested in buying a house that’s not going to change your mind.
I thought they were an appropriately balanced move.
REP: It’s been a tough few years for Alberta. Have we seen the worst of the downturn and what message do you have for agents out west?
What consumers don’t realize when they read a report like ours is how hard the market was hit. What they don’t see is the volumes were down 20%. It was a very hard-hit market but the province went into the oil crisis with the tightest rental market, the youngest population, the lowest unemployment rate.
So if there was any place in the country that could weather an economic storm, it’s Alberta. It had resilience and it’s done a remarkable job. Yes, unemployment is at a 20 year high, (but) we feel businesses in the province have adjusted rapidly, … the worst of the employment crisis is over, and we’ll start to see a modest recovery in home prices.
The real estate veteran shares his views on major market trends for 2017.