Low inventory and high demand are expected to again characterize Canada’s high-end markets next year, although Vancouver is likely to soften due to the 15% foreign-buyer tax and a double-digit average increase in prices in 2016, according to a new report.
Average residential home prices are expected to increase 2% in 2017, led by the Greater Toronto Area, Hamilton/Burlington and Kitchener/Waterloo in the province of Ontario, with an estimated price gain of 8%, 11% and 8% respectively, according to Re/Max, a leading brokerage in Canada.
In its 2017 Housing Market Outlook released last Thursday, Re/Max forecasted that the Greater Vancouver Area will see a 2% price increase next year, a much slower pace compared with this year.
In 2016, the average residential sale prices rose 13% to C$1,020,300 (US$777,200) in Greater Vancouver, while the Greater Toronto Area saw a 17% price increase in 2016 to an estimated C$725,857 (US$552,900), according to Re/Max.
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“Some foreign buyers are starting to focus more attention on Toronto and other markets due to the recent 15% foreign-buyer tax in Vancouver, which is expected to result in slight declines in price and sales in the city because of softer demand,” said Christopher Alexander, regional director of Re/Max’s Ontario-Atlantic Canada Region.
|Comparing Vancouver and Toronto|
|Greater Vancouver Area||Greater Toronto Area|
|Average price in 2016||C$1,020,300||C$725,857|
|Y-O-Y change in 2016||13%||17%|
|Projected price change in 2017||2%||8%|
However, luxury markets in Vancouver and Toronto are expected to remain steady in 2017.
“Slightly softer activity in Vancouver may lessen buyers’ sense of urgency, and low inventory and high demand are expected to continue to characterize the Greater Toronto Area’s upper-end market next year,” Mr. Alexander said.
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