28 Dec Toronto and Vancouver 2016 Real Estate Market Forecast
2016 & 2017 Sales Potential is Looking Good
Has there ever been a better time to be a realtor, property developer or mortgage agent in Toronto and Vancouver? Probably not. CREA, Royal Bank and CMHC are giving the thumbs up for realty transactions over the next few years. Pros are going to do well.
Agents and brokers should be looking for new ways to be the BIG Kahunas of their markets through digital marketing strategies. The payoff for some will be shocking. I hope you’re looking at 2016/17 with an eye for income growth.
Sutton Group = West Coast Realty for instance had a record $11 Billion in transactions last year and this year probably higher. If you’re a broker, you may want to look more closely at building a cohesive digital marketing presence, one that’s innovative and above common thinking about how to build realty business online.
Royal Bank: Outlook is Very Good
RBC is forecasting continued prosperity for the Toronto and Vancouver regions including stronger employment, rising exports, low loonie, low mortgage rates, and strong consumer spending. BC is forecast to be the strongest at 3.1% GDP growth, with Ontario and Saskatchewan just behind.
2015 was ruined by a huge drop in energy company expenditures and unfortunately, Alberta will see further retraction. As the dust settles in the energy sector, the Ontario and BC economies will grow stronger. In fact, RBC believes Ontario’s growth will pick up steam in 2017 to 2.7%. Both provinces are expected to see full time job gains in 2016 and beyond.
“Although frothy in some areas (e.g., Toronto), we believe that the provincial housing market will continue to be supported by strong demand, which will maintain housing construction at historically elevated levels.”
Toronto and Vancouver: Home Prices Remain High with limited Availability
Toronto and Vancouver home availability and prices will continue as a big story. Nationally, CMHC predicts that home prices will continue to climb over the next two years, but at a slower rate – 1.3 per cent in 2016 and 1.4 per cent in 2017. In this first graph from a report on the GTA housing market, it’s suggested that sales are edging lower due to affordability, however the real underlying problem is a lack of housing stock for sale. Realtors need to be more creative in enticing homeowners to sell.
In Toronto, new housing starts may fall by 5% and another 10% although experts are not in agreement about that slowdown, especially regarding the new condo market. Most growth occurred in only 5 property developments, meaning there may still be untapped demand in the greater Toronto area.
Fewer new detached homes will be built in Toronto and multifamily construction will actually make up more than half of new homes constructed there in 2017. Existing home sales will drop to 87,500 units by 2017 as prices grow much too high for first time buyers. If China’s investment rule stays relaxed, more Asian buyers may support a less precipitous drop from 2015’s record home sale numbers and prices.
In Vancouver, CMHC forecasts Vancouver’ s host housing sales will slow only slightly in 2016 and 2017. Affordability is the issue that will cool sales from their record hot numbers. New housing starts are expected remain strong with 20,000 units under construction. The home resale market should grow to their highest levels in the last 10 years and moderately slightly in 2016 and 2017. 2015 was a sizzling year, rising 9% so a further 3% grow is actually fairly positive for realtors and mortgage agents.
Seniors in Vancouver and Toronto
In another story in the Advisor, it’s reported that seniors in Toronto and Vancouver may not want to sell their homes even though they may not be able to afford to live well in retirement. When seniors run out of money, they may have to sell their homes. Some may turn to reverse mortgages which are becoming a hot type of financial service.
That means much of the available housing stock may not be sold. Seniors can live in them until they die and that means a good portion of the resale market will not enter the market. Of course, creative real estate marketers may find a way to help seniors understand the advantages of selling now while prices are so high. Seniors have options such as living in low cost Caribbean or South American countries, or moving to regions of Canada that are cheap. With more babyboomers entering retirement, the sales potential of senior sellers and buyers will be of interest to innovative real estate agents.
Realtors who build their own brand of innovative services can get an edge in the coming years. Persuading homeowners to sell their home and progress with their lives, is just one example of innovation that top selling realtors will use. What else will they be doing? Take a look.
Looking for some more useful tips for Realtors? What to do first? A digital marketing audit can give you the insight you need to make better decisions about to be a winner in the digital wars. Avoid the pain of being an unsuccessful realtor. It’s all in the insight and planning.
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