Most economists are predicting more of the same for the Canadian housing market in 2019 — a slow warming of activity, reined in by rising interest rates and stricter mortgage rules.
But it’s not the same story coast to coast — a few housing markets have started to stand out as strong performers in the otherwise lukewarm housing climate.
For a closer look at which cities are set for a particularly strong 2019, Livabl has spoken with industry experts to get their take on the markets to watch in the year ahead.
Earlier this year, Scotiabank economists Marc Desormeaux and Mary Webb noted that the Quebec housing market, and especially Montreal, had managed to largely avoid the negative effects of new mortgage rules, thanks to its relatively affordable price point.
“The affordability of Montreal’s housing relative to Southern BC’s largest cities and Ontario’s Greater Golden Horseshoe bestows a significant competitive advantage,” they wrote. “Balanced home ownership and rental markets point to relatively modest near-term home price appreciation and rent increases for Montreal, reinforcing its housing affordability edge.”
Heading into the new year, Montreal-based realtor Amy Assad says that the city’s strong job market and low inventory levels should push prices higher.
“There’s a lack of inventory on the market right now. That means that we’re seeing multiple offers on properties that are listed,” Assad tells Livabl. “The city’s also receiving its fair share of positive press, based around its tech sector, which is creating confidence in the marketplace.”
Assad predicts that continued demand should keep inventory levels low for the foreseeable future.
“You have a lot of people moving into the area right now, and I think the strong performance of 2018 should carry on into the new year,” she says.
The Ottawa housing market has also seen consistent activity growth over the past year, with the aggregate home price in the city growing 3.3 percent to $439,313 in the third quarter of the year.
“Really, the increase in prices started in the fall of 2017, when we saw supply start to drop,” Ottawa-based Royal LePage broker Adam Mills tells Livabl. “We have strong local demand and people from other pockets of Canada who are realizing that for a major city our property is undervalued.”
It’s a sentiment echoed by Ottawa-based realtor Diane Allingham, who says that relatively low inventory levels have been pushing prices higher for months.
“We also have several positive things happening in the city right now that are boosting the market,” Allingham tells Livabl. “We have a new LRT in the works, and a strong job market. These are all factors in the strong performance.”
Allingham says she’s also had clients who moved from Toronto and Vancouver looking for a more affordable option.
“We do have some people coming to Ottawa expecting it to be less expensive than it is,” she says. “But the reality is that it is much more affordable than cities like Toronto and Vancouver.”
Finally, those looking for a more affordable alternative to the pricey Toronto housing market continue to turn to the nearby city of Hamilton.
“Given that Toronto has been held back by significant pressure on housing affordability, cities like Hamilton…within commuting distance of Toronto jobs, have served as a release valve,” wrote BMO senior economist Robert Kavcic earlier this year.
Hamilton-based realtor Mike Heddle agrees, saying that the city is experiencing what he calls a “Manhattan effect.”
“When you look at an area like the Greater Golden Horseshoe, you’ve got a limited amount of space, because you’re boxed in by the lake and the Greenbelt. At the same time, roughly three-quarters of the country’s GDP comes from the area,” he tells Livabl. “It’s no secret why Hamilton’s real estate market is doing well given the circumstances.”
Heddle predicts that the effect will likely continue well into 2018. “This isn’t a situation that is going to change in the near future,” he shares.