For 2014 Canada’s housing market will continue to favor sellers. What this means is that there are a lot more buyers than sellers, as a result inventory is low and home prices will remain high. The bargaining power is in the hands of the seller. If you are thinking about buying or selling but you are hesitant about the way the market is heading you should first rewind a bit back in order to see the bigger picture.
2013 was a very cyclical period. The year began with favoring buyers and then the tables slowly started to turn. Although Statistics Canada reports that the Price Index remained unchanged in November last year, this is partly because the price increase in 8 cities was offset by a price decrease in another 5 cities. Prices were up in the Hamilton and St.Catherines – Niagara region as well as Calgary, whereas prices declined in Victoria, Edmonton, Vancouver, and the Ottawa-Gatineau region. However, when looking at the entire fourth quarter of 2013 the average price of a home increased from about 1.2% whereas some homes increased by as high as 3.8%. The price of a standard two-storey home rose by 3.6%, a detached bungalow rose by 3.8% and condominiums rose by 1.2%. Looking at 2013 as a whole, prices went up by 1.4%. Western Canada saw the largest spike in home prices, with Calgary and Vancouver leading the way. However, this is of no surprise since Alberta has the best economy; their unemployment rate is half the rate that Ontario is faced with. This of course impacts their real estate market, there are many buyers because they can afford to buy, leading to an actual shortage of housing supply. This is simple economics; the price goes up if supply is insufficient. As for 2014, it is predicted that prices will continue to rise, and the national projection is a 3.7% increase in price. Sellers will remain having the upper hand since 2014 will also see a slower pace in housing construction, further limiting the supply side. Finance Minister, Jim Flaherty has stated that the government is prepared to intervene if the market gets too hot, but many believe that no action will partake. The market is expected to balance out near the end of 2014.
If you have been contemplating whether or not to sell your home, considering the information above now would be the perfect time to start the selling process. However, if you are looking to buy, you will be better off waiting a bit more.