That’s the forecast by Royal Le Page which expects a 4.9% rise in price appreciation across 53 key Canadian cities by the end of 2018 to $616,919.
“It is prudent that policy makers introduce measures that help protect the housing market from runaway price inflation,” said Phil Soper, president and CEO, Royal LePage, “However, natural supply and demand forces will always triumph over regulatory tinkering. Attempting to use public policy to steer property prices in huge, rapidly growing cities like Toronto and Vancouver is like a tugboat trying to turn an ocean liner. Consistent, measured policy can have a positive impact. Just don’t try to turn the market on a dime or you risk sinking the ship.”
Soper added that the continued tight supply in some markets will continue to drive prices higher once the initial impact of the OSFI stress tests moderates, while those with softer demand will struggle to adapt to the affect of the tightened mortgage rules.
Prices in the GTA are forecast to outperform the national average with a 6.8% increase to an aggregate $901,392 with condos fueling the rise.
The Greater Montreal Area will see the second highest growth at 5.5% to $408,285.
Greater Vancouver will see a 5.2% price rise to an aggregate $1,353,924.
“We are watching how the new OSFI stress test will impact the Greater Vancouver market,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “Low inventory will continue to put upward pressure on prices. However, with the introduction of the stress test, as well as other factors such as potential interest rate hikes, price growth will likely be limited to mid-single digits.”
The price rise forecast for Ottawa is 3.2% to 458.208; Calgary up 2.3% to $494,109; Edmonton up 1.5% to $382,180; Winnipeg up 4% to $315,120; and Halifax up 2.5% to $326,975.
More market update:
The impact of the B-20 mortgage rule changes by OFSI which come into effect in January will, along with supply issues, limit national home prices in the year ahead.