TD Bank Predicts When Toronto, Vancouver Housing Markets Will Come Down

Affordability is becoming a growing challenge for many individuals and families in Toronto and Vancouver's Hot Housing Market according to Royal Le Page noted in a new report.

The prices of any type of residential property in Greater Toronto and Greater Vancouver have significantly increased comparing to last year. In Greater Toronto, residential real estate went up 11.9 per cent this year and in Greater Vancouver, it went up 12.9 per cent to an average of $928,532.

These increases in prices have many real estate experts warning that housing affordability is headed towards a crisis.

But an economic forecast from TD Bank states that the problem could soon reverse itself through a slowdown in the housing market that will end years of house-price run-ups in Ontario and British Columbia.

According to TD Bank - the country's third largest mortgage lender, housing markets in Ontario and B.C. will turn down next year, and stay down at least through 2017 due to "signs of extreme weakness".

TD Bank predicts that home sales in Ontario falling 1.4 per cent next year, before falling a steeper 9 per cent in 2017. In British Columbia, the forecast calls for a 7.4-per-cent decline in home sales next year and a 14.1-per-cent drop in sales in 2017.

The weakness will be due to “both weaker demand as well as a multi-year period of overbuilding,” TD economists wrote.

“As affordability challenges continue to intensify, markets in B.C. and Ontario are expected to record a tapering in sales and price growth in 2016 and into 2017.

Royal LePage’s house price survey, released Thursday, took a more rosy view of the housing market, despite its warning about eroding affordability.

“Home ownership remains a bright light amid unsettled investment and savings options in volatile global capital markets,” the real estate agency said in a statement.

Reference: Huffington Post Canada

http://www.huffingtonpost.ca/…/toronto-vancouver-house-pric…