We talk a lot on this blog about Ottawa and Toronto mortgages, even touching at times on Calgary mortgages; and there’s good reason for it. These three cities, along with Vancouver and Montreal, make up nearly half of Canada’s entire population. So it stands to reason that a look at what’s happening in them paints a fairly reasonable picture of what’s happening in the country as a whole. That’s important when looking at supply and demand – something that’s become a concern in just about every Canadian housing market.
Vancouver
Vancouver is without question, one of the biggest points of worry in the country. Sales are the lowest they’ve been in a decade, while prices are at their very highest. Add to that the fact that resale values have also fallen 10 per cent from last April, and the concern mounts. It was in 2009 when the city saw this kind of imbalance – and that was when CMHC was still backing many of their mortgages. Now with those measures being tightened severely, and it becoming increasingly difficult to secure a mortgage, this market is going to take several years to balance out.
Calgary
Calgary experienced a huge housing boom in the early 2000s, and then a correction began in 2007. The problem here is that people in the market think that their investment is only going to keep growing in value and so, home prices continue to climb (albeit slowly) to reflect that. If values don’t continue to soar, but prices do, the next correction will be much harder felt. Sales are doing fairly well here, but they’re still nowhere near the highs that were being seen a decade ago.
Ottawa
Ottawa is looking the best out of all the big five cities. The only real concern here is that new listings are flooding the market every single day while sellers want to capitalize on the amount of buyers out there. The problem is, there may not be enough buyers for the listings. Sales are still going strong, but how long can they keep that pace?
Toronto
Of course, Toronto has been rivaling Vancouver for the most “condo concern” in the country, and that concern is ongoing. The biggest problem, and one that many Toronto condo developers have already seen, is that while resales are taking over new sales, and more condos are being built by the day, the vacancy rate is going to soar and thousands of units will sit empty. The resale market is one of the best in the country. But unless Toronto can do something about its overstock of inventory, this city will be in for a very hard landing.
Montreal
Montreal is a city that rarely comes up in housing market concern conversations. And perhaps it’s because of this that so many people mistakenly believe that this market shows no cause for worry. In fact, the opposite is true. The only thing keeping Montreal’s market from sinking is their resale market, which was up 3.5 per cent in April. Other than that, the story is much the same here as it in in Toronto and Vancouver – too much inventory, not enough demand.
