Credit Firm Predicts Falling Home Prices
Photo: Flickr / Chris Brown
For new homebuyers looking desperately for a break from what have been historically high home prices, such wishes may soon be answered. Based on a new report released by Moody’s Analytics – an internationally renowned credit rating firm, the organization has suggested that property prices will actually contract over the coming years in Canada. However, there is a catch – this trend will not extend to the city of Toronto, which has seen record high home prices for virtually all types of residential properties. Along with million dollar single-family homes, even the condominium market – traditionally seen as a more affordable way to purchase property in the city – has even started to become potentially unaffordable for first time homebuyers.
According to a report penned by an analytical director at Moody’s, home prices in Canada as well as their surrounding growth or contracting trends are heavily dependent on what occurs in Toronto and Vancouver. In other words, if there is a sudden shift in price trends in either city, there is an incredibly high possibility that this will create smaller and similar trends in surrounding regions. And there is a very large mountain of evidence that such influence already occurs – a great example being the price trends throughout both major suburban and metropolitan areas within Vancouver and Toronto.
Currently, price trends in Toronto, despite seeing a significant drop of more than a quarter of all sales volume compared to a few months ago as a result of the newly implemented housing regulations and the foreign buyer tax by the provincial government, is already seeing home prices rise once again. Vancouver is stagnant, mostly because the province’s own price control methods have now been entrenched after more than a year in service. Due to these trends, Moody’s has predicted that over the next five years, price trends in Toronto will grow by more than seven percent, while Vancouver’s prices will effectively remain stagnant. In addition, the agency has grim outlooks when it comes to the home prices within the Maritimes as well as the Prairies, which will see price drops between two and six percent on average. Meanwhile, Ottawa and Hamilton are being forecast to have rising home prices by 3.4% and 5.8%, respectively.
Such news is both a blessing and a curse for new homeowners, who now potentially will have to move to the Canadian West to take advantage of relatively affordable home prices compared to those in Ontario, especially the Greater Toronto Area.
Published Date: Oct 16 2017