Canadian Real Estate Market Forecast 2017

The Mortgage Emporium – Mortgage Broker Ottawa 

As trusted Ottawa Mortgage Brokers, we work tirelessly to stay abreast of what’s happening in the market place. Allowing us to offer sound and quality advice to our clients. Many home owners, and prospective home owners are wondering what a Canadian Real Estate Market Forecast in 2017 would like.

2017 Canadian Real Estate Market Forecast

Per the Canadian Real Estate Association (CREA), national sales are forecast to drop in 2017 by 3.3%, compared to the previous year. Specifically, in Ontario, they are looking at home sales to decline in Ontario by 2.7%. To take a look at the full statistics and forecast by province click here to visit CREA’s website.

In its annual year-end report, CREA states: “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.”

Most Canadian markets are leaning towards a flattening out of property prices, with some areas of the country experiencing a decline in both sales activity and prices. As other areas continue to experience price gains, albeit at a much slower pace than we’ve seen in recent years.

Consider the slowing of the Calgary real estate market. We expected aggressive price drops when oil prices crashed, however the market didn’t suffer all that much. Sure, there were price decreases, most neighbourhoods saw price reductions that were less than 5%.

The biggest factor in the predicted 2017 slowdown are the tighter mortgage regulations that were introduced in 2016. “Tightened regulations are expected to reduce the number of first-time buyers who qualify for mortgage financing, particularly in pricier markets, where there is a severe shortage of lower-priced listings.” Click here to read our blog about the change to the Canadian mortgage rules.

If you’re thinking about purchasing a home or refinancing the mortgage your currently have, our Ottawa Mortgage brokers will take the time to discuss your personal and individual financial situation. This way we can offer you the best advice and guidance.

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Bank of Canada – Hints at Longer Wait for Rate Hike

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In a move anticipated by most analysts, The Bank of Canada announced today that the overnight rate will remain at 1 per cent target, suggesting it – along with variable rates — won’t rise anytime soon.

The Bank cited “weaker business investment and exports” as a one reason the rate remained the same, along with a pullback in household spending, the European recession, slow but gradual recovery in the U.S and muted inflation.

“Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent,” the bank said in a statement. “While some modest withdrawal of monetary policy stimulus will likely be required over time, consistent with achieving the two per cent inflation target, the more muted inflation outlook and the beginnings of a more constructive evolution of imbalances in the household sector suggests that the timing of any such withdrawal is less imminent than previously anticipated.”

Governor Mark Carney’s commentary hinted that no rate hike is in the cards in the near future, but according to Jimmy Jean, economic strategist at Desjardins, his painting of lower interest rates as desirable came as a shock.

“It’s a surprise,” he said, “It has more dovish content than what we were anticipating. The forecast adjustments were pretty much in line with what we were expecting. The language is really where the surprise comes from. We still don’t think we’re likely to see any move (on interest rates) in 2013.”

The announcement likely doesn’t come as a shock to brokers who have been monitoring the rate.

Short-term mortgage rates are unlikely to rise anytime soon, but overall rates are not expected to fall.

The economy slowed more than anticipated in the latter half of 2012, falling below the projections outlined by the Bank in the Monetary Policy Report (MPR) released in October, and is expected to continue at a “restrained” pace until the second half of 2014. The Bank revisited earlier projections for 2013, revising the 2.3 per cent growth estimate to 2 per cent.
carney is expected to address new numbers later today at a press conference alongside Bank of

Canada Senior Deputy Governor Tiff Macklem. The Bank will announce the overnight rate target again on March 6, and provide a fully updated outlook for the economy and inflation in the new MPR released April 17, 2013.

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By Jemima Codrington

Canada’s Waning Growth Puts Balanced Budget at Risk

Theophilos Argitis, Bloomberg News | Jan 21, 2013 1:46 PM ET
More from Bloomberg News

The Mortgage Emporium – Ottawa Mortgage

Aaron Vincent Elkaim/The Canadian PressBudget planners are concerned that weaker revenue may outpace Finance Minister Jim Flaherty’s ability to offset it through accelerated spending cuts.

Canada’s revenue outlook has deteriorated since Finance Minister Jim Flaherty updated his fiscal plan in November amid signs the economy has slowed, making it more difficult to bring the budget into balance, a person with direct knowledge of the government’s budget planning said.

Budget planners are concerned that weaker revenue may outpace Flaherty’s ability to offset it through accelerated spending cuts, especially since the government pledged not to curb transfers to individuals and provinces, the person said on condition they not be identified because they aren’t authorized to speak to the media on the subject. Still, the goal remains to balance the budget by 2015, the person said.

Tax revenues are just not going to be maintaining the pace you would have expected just six months ago

Canada’s economy probably had its worst six-month performance since the end of the 2009 recession in the second half of last year, as exports fell and uncertainty about the global expansion prompted businesses to curb spending, leading economists to scale back their expectations for 2013.

“Tax revenues are just not going to be maintaining the pace you would have expected just six months ago,” said David Watt, chief economist at HSBC Bank Canada.

Flaherty, seeking to return the country to surpluses while ensuring the economy isn’t hurt by fiscal tightening, already scaled back revenue projections in a November budget update by $7-billion for the next fiscal year and by $36-billion over five years, citing lower commodity prices.

Optimistic Forecast

In that update, growth projections for 2013 were cut to 2% from a March forecast of 2.4% when the budget for the fiscal year beginning in April was released. That 2% now looks optimistic.

Slower growth will sap $22-billion a year from Canada’s economy, budget watchdog warns

Parliamentary Budget Officer Kevin Page says in a new report that he anticipates economic growth will brake to an annual rate of 1.6% in the second half of this year, after slowing to 1.8% in the first half.

Read full story here.

Growth in 2013 will probably be closer to 1.7%, according to the median of the forecasts of economists at six Canadian banks: Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Nova Scotia, BMO Capital Markets, Royal Bank of Canada and HSBC Canada.

A 0.3 percentage-point reduction in 2013 growth projections may create an additional budget shortfall of more than $1-billion in the next fiscal year and almost $4-billion over three years, according to Bloomberg calculations based on a formula provided by the finance department in its last update. A one-year 1 percentage-point reduction in growth narrows the budget balance by $3.9-billion in the first year and $12.8-billion over three years, according to that formula.

“Growth has not been as firm as they had been expecting,” Watt said. “As a result, the fiscal situation has been a bit more of a challenge.”

Budget Balance

Flaherty has said he will balance the budget before the next federal election, expected in 2015, by cutting departmental expenses and forgoing new spending. A government pledge not to raise taxes or cut transfers to individuals and provinces is handcuffing the government’s ability to meet that goal as revenue wanes.

Direct program spending, which excludes transfers and makes up just under 50% of federal government spending, is projected to decline to $118.9-billion in the fiscal year that begins April 1, down from $120.8-billion projected in the 2012-13 fiscal year, then remain little changed through 2017, according to the November fiscal update. As a share of GDP, direct program expenses will decline to 5.4% by 2017, the lowest since at least 1967, from 6.7% this year.

The finance department also scaled back its revenue assumptions in the update, after final figures for the fiscal 2011-12 showed the government’s revenue as a share of the economy shrank to its lowest in at least 45 years.

Canada now projects total tax revenue as a share of GDP will average 14.3% over the next five years, ranging from 14% in the current year to as high as 14.4% in 2015. That ratio has averaged about 15.5% over the previous 10 years.

Bloomberg