But that doesn’t spell the end for the country’s former hottest market.
“If were to call for an 8.5% correction in Ottawa or Montreal, that would be a huge deal. It would represent a market crash because the price appreciation has been moderate. In Vancouver, when you see prices rising at the rate they have been rising in the mid to high 20s, 8.5% in that context seems moderate,” Phil Soper, president of Royal LePage, told MortgageBrokerNews.ca. “Think of it this way, in relative terms, rather than rising by 26% you’re going the other direction by 8.5%, in market terms that’s a significant market turnaround. It is a significant change but it’s not unexpected.”
The brokerage expects the home price appreciation gap to narrow in 2017, with traditionally hot markets to trend to more historical norms, according to its 2017 real estate report, released early Thursday.
That includes Vancouver, which is forecasted to experience home price depreciation.
But Toronto is trending in the other direction.
“Like Greater Vancouver, the Greater Toronto Area markets we studied in our House Price Composite are seeing double-digit year-over-year home price appreciation across the board.
"However, these two regions, often grouped together as Canada’s booming real estate markets, are on divergent paths,” Soper said in the report. “Unlike Vancouver where a price correction is underway, there is no relief in sight for the GTA – forward momentum and supporting fundamentals in the region are that strong. And it is worth noting, Toronto area home prices are much lower that those on the west coast.”
As for Alberta, it seems the hard-hit market has weathered the worst of the economic storm.
“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%,” Soper said. “It was a very hard-hit market but the province went into the oil crisis with the tightest reno market, the youngest population, the lowest unemployment rate. So if there was any province in the country that could handle a downturn.”
A Vancouver price correction is expected to contribute to more moderate home price growth across the country, according to a comprehensive report.