What is the Canadian Real Estate Market Outlook for 2015?
The big question for real estate in Edmonton as the peak real estate season approaches is, what will happen in Edmonton Real Estate Market? Buy a house. Don’t buy a house. Soft landing. Crash landing. What can we honestly expect?
The experts were not in agreement in 2014 but this time they are. They agree that prices will fall mostly caused by the recovery of the global economy. They also agree that housing affordability is stretched and low interest rates cannot stay at current levels and will rise.
If the global economy were a ballgame we most certainly would not be headed to the World Series. Europe is still struggling under the credit crunch and oil prices are depressed. Yet, thankfully things are slowly improving in the U.S. and within Canada, and the important teams are still in the game: our employment rate is stable (so far), oil prices are not (yet) low enough to cause real concern, and exports have picked up as the value of our dollar has dropped. This all leads economists to expect we'll see higher bond and mortgage rates and a nation wide cooling of the housing market over the next couple of years.
Senior economist with RBC Bank, Robert Hogue, says he believes 2015 will be “a moderating phase for the market with a soft landing in 2016.” Hogue is predicting that national home prices will possibly rise 1% or maybe 1.5% in 2015, as buyers race to get in the market before mortgage rates increase, after which prices will fall later in the year. “It’s one of the reasons why 2014 was such a strong year.”
However, he cautions: “Canada’s real estate market really is a multi-headed beast. It’s essentially very strong in Toronto, Vancouver and Calgary, but it’s balanced or soft in the majority of other markets.” As such, he predicts we’ll see a cooling of the three biggest markets by the end of the year in response to small mortgage rate hikes starting mid-year.
With all of these predictions, what is the best strategy for a home buyer or seller? Selling earlier in the year may realize higher prices then late in 2015, but by the same token, buyers are slightly nervous as they anticipate falling house prices and increased interest rates. In the end, you have to enter into the Real Estate market at whatever point you are ready. Whether real estate sales are skyrocketing or prices are falling, it all equals out in the end. As home prices fall, interest rates rise, and vice versa. In Real Estate, as with all other aspects of life, there are no guarantees. Homes are bought and sold in literally every market. If you're ready to buy a home rather than paying your landlords mortgage, then you should do so.
Unless you are purchasing strictly for investment purposes, the fluctuations in the market will not affect you, until of course, you are selling or buying again.