- Average home price likely to rise 4.1% across Canada in 2016
- Increase in values would be smallest since '12, brokerage says
Price gains for residential real estate are likely to slow this year across Canada as economic turmoil abroad and low oil prices at home give some buyers pause, according to brokerage Royal LePage.
The average Canadian home price probably will rise 4.1 percent in 2016, Royal LePage, the country’s largest real estate firm, said in a report released Wednesday. That’s down from a 6.5 percent growth pace last year, and would be the smallest increase since 2012, according to the firm.
Canada is being buffeted by the continued low price of oil and the deceleration of the economy in China, Canada’s second-largest trading partner, according to Royal LePage. Mortgage rule changes probably will have little impact on people’s ability to buy because the cost of borrowing is so low and demand for housing remains high in Vancouver and Toronto, the country’s two priciest real estate markets, the brokerage said.
“It doesn’t have as positive a feel as the start of 2015,” Phil Soper, chief executive officer of the brokerage, a unit of Brookfield Real Estate Services Inc., said in an interview. “When we started 2015, we were dealing with the oil shock, but most of us believed it was a short-term hiccup in global commodity markets and not a long-term trend. The challenges the Chinese economy has faced and the other geopolitical problems around the world all point to a more somber mood for Canada.”
The largest increase in home prices is likely to be in Vancouver, with a 9 percent jump forecast for 2016, followed by Toronto, at 5.5 percent, Royal LePage said. Price gains in all other major cities will probably be no more than 2.5 percent, with a decline of 3 percent forecast in Calgary and a 2 percent drop expected in Edmonton, according to the firm.