May 26, 2019

Canada’s housing market headed for weakest year in almost decade, warns CREA in updated outlook

The number of homes sold in Canada was down 4.4 percent in February with prices down 5.2 percent, which is a 10-year low. If the expected pull back of 1.6 percent occurs in 2019, then that would mark the weakest annual sales since 2010. The year-over-year drop in sales was heavily concentrated in British Columbia and Alberta. Part of the blame can be attributed to a bad winter, but also the mortgage stress test, which came into effect in January 2018. We’ll have to wait to see if the housing market picks up as the weather gets better but the projections are not as robust as they have been in previous years.

“Only time will tell whether successive changes to mortgage regulations went too far, since the impact of policy decisions becomes apparent only well after the fact.”

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