On November 27, 2019, RE/MAX released its highly anticipated Canadian housing market outlook for 2020. Here are come general key findings from the report:
Fifty-one per cent of Canadians are considering buying a property in the next five years. This is up from 36 per cent at the same time last year. The increase is attributed to consumers’ adjustment to the mortgage stress test and increased purchasing power. Only two in 10 survey respondents said the mortgage stress test has negatively impacted their ability to purchase a home.
Liveability continues to be important to Canadians, with more than half wanting to live closer to green spaces and shopping/dining locations. Specific figures:
• 62% of Canadians would like to live near shopping/dining locations
• 59% would like to live closer to green spaces
• 30% would like to live closer to work
• 36% would like to live closer to public transit
Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the Greater Toronto Area are expected to drive the market forward. The estimated average sale price increase for 2020 is six per cent, two points higher than the growth experienced between 2018 ($736,256) and 2019 ($766,236). The city saw 76,413 properties sold in 2019, up 12 per cent from 2018 (68,064). While Toronto is experiencing its “busiest” construction season ever, housing supply still falls short of the demands of the city’s rapidly growing population.
Cities such as Ottawa and Windsor are seller’s markets, showing substantial increases in average residential sale price at 11.7 and 11 per cent, respectively. This strong growth is expected to continue into 2020, with Ottawa’s new LRT system impacting surrounding development and Windsor’s continued affordability attracting young professionals to the area. Buyers are also not burdened by the mortgage stress test, as they were in 2018.
The Niagara region is also showing strong growth, with average residential sale price increasing almost 13 per cent, from $378,517 in 2018 to $427,487.50 in 2019. Value-conscious consumers from the Greater Toronto Area are buying in droves, with many choosing to live in the region while commuting to Toronto.
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”
Seller's market to prevail in 2020, prices to increase 3.8%
The Hamilton-Burlington housing market will favour sellers in 2020, with an average residential sale price increase of 3.8 per cent anticipated for the region next year, in line with historical price appreciation.
Hamilton-Burlington is currently experiencing a seller’s market, with 1.9 months of inventory in Hamilton and 1.6 months of inventory in Burlington. Buyers have adjusted to the mortgage stress test and have found other ways to finance home purchases, such as through private lenders as opposed to banks.
There is currently a development freeze in downtown Burlington that could delay future development in the area even further if it is not lifted. The industrial sector in Hamilton has picked back up and the economy is expected to be impacted positively in the coming year. Move-over buyers from the GTA who are looking for more space are driving the market.
Increased GO Train service and higher levels of affordability in the region compared to the GTA are the most influential factors that will impact the Hamilton-Burlington housing market in 2020. Move-over buyers are expected to drive demand in 2020, in particular, moving from the GTA in search of more affordable properties.
The hottest neighbourhoods in Hamilton for 2020 include Leckie Park, Waterdown West and Fifty Point. In Burlington, in-demand neighbourhoods include Brant Hills, Central and The Orchard.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.
Most individual markets surveyed across Canada experienced moderate price increases year-over-year from 2018 to 2019. However, some regions in Ontario continue to experience higher-than-normal gains, including London (+10.7 per cent), Windsor (+11 per cent), Ottawa (+11.7 per cent) and Niagara (+12.9 per cent).
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”