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What Will Business Look like in 2017? Canadian Real Estate Market Predictions
Overall, 2016 was a great year for Canadian real estate. While some markets cooled somewhat, others continued to flourish. The Teranet – National Bank House Price Index, which reports on the rate of change of Canadian single-family home prices, reported in January of 2017 that December 2016 closed out the year as the 11th consecutive month of acceleration in single-family home prices! This was the largest 12 month increase since June of 2010.
So, with a strong finish to 2016, what do we have to look forward to in 2017?
MoneySense released an article in January which suggested that, in 2017, there will be a flattening out of property prices in most Canadian markets. According to the article, the Canadian Real Estate Association (CREA) is cited as forecasting that national sales will drop in 2017 – “Transactions in B.C. and Ontario are anticipated to remain strong but fall short of this year’s record levels due to deteriorating affordability, an ongoing shortage of affordably priced listings for single family homes and tightened mortgage regulations.” Read more on this here: http://www.moneysense.ca/spend/real-estate/canadian-real-estate-market-outlook-2017/.
While the MoneySense article quoted factors that may flatten the market, such as housing affordability and tightened mortgage regulation, another article from CBC discussed 5 factors that could determine 2017 outcomes where the real estate market is concerned (http://www.cbc.ca/news/business/canada-real-estate-homes-2017-1.3913968):
- Interest rates
- The Canadian economy
- Foreign buyers
- Government regulation
It is quite fair to assume that any significant movement in any of these areas could definitely impact the Canadian real estate market. In Vancouver, for example, we are already seeing changes since the introduction of the 15% foreign buyers tax.
As a broker, diversifying your portfolio to have a good balance of purchase and refinancing business is a great way to lessen impacts in the event of a cooling in the marketplace. Being dependent on purchase mortgages means that if less people are buying, you could feel it directly.
Totally purchase dependent now? You can use your property research tools to identify past clients where you have arranged purchase mortgages and examine where there have been increases to their property value to pitch refinance options like home equity lines of credit.
For more information about tools that you can use to identify refinance opportunities within your existing book of business visit http://purview.ca/.
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