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2016 Canadian Real Estate Market Trends Review and 2017 Real Estate Market Predictions

2016 was certainly eventful as far as the Canadian Real Estate market is concerned.

The Teranet–National Bank National Composite House Price Index™ reported increases for 10 consecutive months for home prices right up to December 2016. These increases occurred despite major changes to mortgage lending rules that saw many industry experts speculating a negative impact on the real estate market as a result.

Another interesting 2016 trend deals with interest rates. The Bank of Canada held the key national lending rate interest rate steady at 0.5% throughout the entire year, with no increases or decreases.

Some other interesting developments in 2016 included the OSFI crackdown on underwriting as well as the new mortgage rules that were announced towards the end of the year. Another major development in 2016 was the introduction of the new tax on foreign buyers who are non-residents of Canada in the Metro Vancouver area.

So, what’s in store for 2017? Well, we are into our second of the year and already there has been talk of a new tax on foreign buyers who want to buy real estate in Canada extending beyond what was implemented in the Metro Vancouver area. Two Victoria city councilors are now calling on the province to extend the foreign home buyers tax to the capital region and grant municipalities the power to tax vacant homes. Reviews on the subject are mixed; while some news outlets have reported a steep drop in real estate transactions in the Vancouver area, others are speculating that long term the tax won’t stop foreign investment in the city.

You can read more on both of these developments here: http://www.cbc.ca/news/canada/british-columbia/victoria-taxes-foreign-buyers-vacant-homes-1.3941915 and

http://www.ctvnews.ca/business/b-c-property-data-shows-sharp-declines-after-tax-on-foreign-buyers-1.3230863

Will a real estate tax on foreign buyers become a trend in 2017 in other major urban centers? Toronto City Councilor Jim Karygiannis has called for a 5% tax on foreign buyers who want to buy in Toronto so it isn’t out of the question.

What else is new? According to the Toronto Star, CMHC has also announced that it will be raising its premiums in March: https://www.thestar.com/business/2017/01/17/cmhc-to-raise-mortgage-insurance-premiums.html.

As far as interest rates, while the Bank of Canada held the key mortgage lending rate steady at 0.5% in their January announcement, some have speculated that rates will increase in 2017. For example, back in January, Vanguard Group, one of Canada’s major money managers, noted that the economy was in better shape than many think, and higher rates would be a direct result.

Here are some other 2017 predictions according to financial expert Preet Banerjee:

  • Toronto’s housing market will remain hot
  • Vancouver’s housing market may cool
  • Everywhere else will cool slightly or stay the same

It pays to stay informed. How can you predict what is yet to come where the Canadian real estate market is concerned? Pay attention to national house price indices such as the Teranet–National Bank National Composite House Price Index™, pay attention to changes that the government is making concerning real estate, and leverage property valuation tools that you have at your disposal to look at trends and changes at the macro (cities) and micro levels (communities). This will help you to remain agile and competitive in an ever-changing environment.

For more information about the Canadian real estate market’s potential impact on FI’s please visit, and for more information about the Teranet–National Bank National Composite House Price Index™ please visit http://www.housepriceindex.ca/.

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