The winter season is often considered down-time when it comes to the real estate market, and for a good reason: it’s cold outside. Buying and selling activity has been known to taper down with the onset of snowstorms and winter holidays, as buyers become reluctant to venture out for open houses and visits.
That being said, 2018 might see Montreal’s housing market depart from the typical winter market trends.
1. Interest rates will continue to rise
The current consensus among financial analysts is that BoC will rise their mortgage interest rates again in October, although economic data between now and may change the course of their predictions.
Factors influencing the Canadian interest rate include:
- U.S. and Mexico excluding Canada from their NAFTA negotiations, which has forced Canadian policy makers into the sidelines. Ongoing tensions between the U.S. and China have caused a large amount of doubt when it comes to trade relationships between North America and Asia, in the near future.
- Canada’s year-over-year inflation rate has reached record highs between June 2017 to June 2018, partly as a result of ill-advised U.S. tax cuts and aggressive stimulus spending.
- Uncertainty over UK’s Brexit deadline and terms, as well as economic slowdowns in the rest of Europe (Turkey, Italy).
As fall rolls in, Canadian lenders will be piecing together these factors in an attempt to predict their outcomes on national mortgage rates.
2. Prices are also expected to rise
Montreal’s housing prices show no indication of slowing down, due in part to dropping inventory and accelerated demand. Buyers who have been edged out after the implementation of a stress test earlier this year are likely to step back into the market during the fall and winter of 2018.
The completion of large construction projects in the summer of 2019 could taper down the condominium market. In the near future, however, we can expect an upward trend when it comes to real estate appreciation.
According to CREA’s latest forecast, home prices are projected to rise in Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island. Meanwhile home prices are forecast to drop by 1% in Alberta, by 1.5% in Saskatchewan and by 2.9% in Newfoundland and Labrador.
3. Housing market corrections and policies?
At the beginning of 2018, Ontario and B.C saw a drop in both their sales and housing prices. This was largely due to a series of measures put in place by the provincial governments, aimed at cooling down risk-prone markets. Along with a new stress tests, foreign buyers in those provinces were subjected to an additional acquisition tax amounting to 15% of the property’s value.
With Montreal’s real estate climate now sitting firmly in a seller’s market, and the CMHC hinting at signs of overheating, government intervention could be a possibility in the future.
Montreal’s Mayor Valerie Plante has already suggested that instead of imposing new taxes, Montreal should focus on increasing the supply of housing to keep prices in check. One of her campaign promises was to incentivize developers to set aside 40% of the units in a new development for social and affordable housing.
What are your thoughts on Montreal’s housing market in the near future? Let us know in the comments!
This article, What To Expect From Montreal’s Upcoming Winter Real Estate Market: 2018, appeared first on Shupilov News