For months, industry watchers have been wondering when the Canadian housing market will make its way out of its 2018 sales slump. Now, economists have started to file their predictions for the second half of the year.
When will activity pick up again? Read on for three predictions of where the market is headed:
Things won’t be heating up in the short term. At least not according to Royal Bank of Canada (RBC) senior economist Robert Hogue. “We held the view until now that the transitory effect of the [mortgage] stress test implemented on Jan. 1 would start to wane by spring,” he said in a recent statement. “Well, there was no indication of any material rebound in home resale activity in May.” According to Hogue, buyers and sellers will likely wait out the summer months, before returning to the market in the fall.
Volatility will remain high. The market has been volatile over the last year, and that won’t be changing anytime soon, according to Canadian Imperial Bank of Commerce (CIBCa0 Senior Economist Benjamin Tal. “Regulatory changes…resulted in an outsized drop in resale activity,” he wrote in a recent report. Tal predicts the volatility will persist until at least the end of the year.
Things could change in the new year. Many economists are calling for an uptick in sales and prices in the final quarter of 2018, heading into 2019. While the market won’t reach the heights of 2017’s bubble-like conditions, things should be moving in an upward direction in 2019.