Housing markets in Ontario and British Columbia have been hot out of the gates in 2016, which has the Canadian Real Estate Association updating its predictions for residential real estate this year. The trade association is now saying 2016 will be yet another year of “strong price gains,” with especially heated market performances expected in Ontario’s Greater Toronto Area and British Columbia’s Lower Mainland.
“Price gains in these regions are expected to continue to stand in sharp contrast to moderate price declines among housing markets whose prospects are closely tied to oil and other natural resource prices,” said CREA in a statement this week.
CREA predicts resale home prices in Ontario will rise 8.2 per cent this year. Only gains in British Columbia are forecasted to be greater, with CREA projecting an annual price increase of 11.8 per cent for the province in 2016.
While prices continue to rise considerably year-over-year in Ontario, the number of dwellings changing hands via MLS systems is only expected to inch up 0.3 per cent. “A lack of supply is expected to hold activity in check in Ontario in 2016… despite the continuation of strong demand,” CREA said.
CREA’s upwardly adjusted forecast was posted the same day as its February market statistics, which showed the average price of an Ontario home had risen 12.7 per cent year-over-year to $511,967.
In the GTA last month, price appreciation trended above the provincial rate, with the average existing-home price reaching $685,278, up 14.9 per cent from the same time a year ago.
The association’s previous forecasts for this year assumed “cooling activity” and “smaller price gains” were in the cards for the BC and Ontario housing markets this year.
“However, many of the defining themes among Canadian housing markets last year have persisted, and in some cases intensified, in early 2016,” says CREA.