Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Briefing highlights

  • How your housing market may fare
  • A Doug Ford movie poster I’d love to see
  • Markets at a glance
  • Factory sales rise for third month
  • China strikes back with tariffs

Whither housing markets

Canada’s housing markets are broadly stabilizing after federal and provincial policy makers induced a slowdown that would head off any bubbles from bursting.

With success seemingly at hand, Canadian homeowners want to know what happens next, this year having been one of turmoil.

Observers believe markets will perk up modestly, with sales and prices down this year but up next, depending on where you live, of course, and how things play out there.

Story continues below advertisement

This follows the latest numbers from the Canadian Real Estate Association on Monday, which showed the number of home sales increasing in August for the fourth month in a row.

Economists, though, don’t believe Canada is heading back to the frothy days before British Columbia and Ontario moved to calm the Vancouver and Toronto area markets by imposing an extra tax on purchases by foreign buyers and the federal bank regulator brought in new mortgage-qualification rules.

“We’re not worried that the year-over-year price acceleration at the national level in July and August could be signaling an impending return of overheated conditions,” said Royal Bank of Canada senior economist Robert Hogue.

Here’s what CREA now forecasts for sales this year and next:

Source: CREA

“Economic and demographic fundamentals remain supportive for housing demand in many parts of the country; however, policy headwinds have impacted homebuyer sentiment and access to mortgage financing in many housing markets,” CREA said.

“Further expected interest rate increases, combined with this year’s new federal mortgage stress test, are expected to continue to keep home sales activity in check over the rest of the year and into 2019,” the group added.

“When the new mortgage stress test was announced last October, it was expected that many homebuyers would expedite their purchases during the two-and-a-half-month window before it took effect this year. In reality, the response to the new policy was stronger than expected. In December, 2017, seasonally adjusted national home sales surged to the highest on record before dropping sharply in early 2018.”

Story continues below advertisement

Looking at the recent numbers, RBC’s Mr. Hogue said policy makers “should be quite satisfied” with how the Vancouver and Toronto markets reacted. As in, it appears that they pulled off the hoped-for soft landing.

“Demand-supply conditions returned to balance, and annual price gains significantly decelerated to low single-digits,” he said.

“We expect these cooler conditions to persist in the near term. Given their size, this means that overall conditions in Canada are poised to stay cool. We expect that rising interest rates will lower the market’s temperature by a few degrees in Ottawa and Montreal.”

Where prices are concerned, here’s CREA’s outlook:

Source: CREA

“The national average price is expected to be skewed lower by reduced sales activity for higher-priced homes, with provinces posting a smaller average price decline compared to the national result,” CREA said.

“Indeed, more than half of all provinces are projected to see average price gains in 2018, including British Columbia.”

Story continues below advertisement

While the Vancouver area is still a work in progress, southwestern Ontario is bouncing back.

“The hottest region of the country, by far, continues to be southwestern Ontario, where each of Windsor (+19 per cent), London (+18 per cent), and now Kitchener-Waterloo (+15 per cent) have posted rare double-digit price gains in the past year,” said Bank of Montreal chief economist Douglas Porter.

“On the flip side, the only price declines in the country last month were all found in the Prairies, as each of Edmonton, Regina and Saskatoon aw modest year-over-year drops.”

As Toronto-Dominion Bank economist Rishi Sondhi put it, Canada’s housing markets are without doubt moving beyond the slump sparked by the new mortgage stress tests.

“Questions now centre on the path of the recovery going forward,” Mr. Sondhi said.

“Our view is that sales and prices will continue to grow, but that rising borrowing costs will restrain the pace of expansion,” he added.

Story continues below advertisement

“This is particularly true for more expensive markets in Ontario and B.C., where affordability pressures are acute.”

Read more

A movie poster I’d love to see

Photo illustration

Read more

Markets at a glance

Read more

Factory sales rise

Canada’s manufacturing sector scored its third straight month of gains in July as sales rose 0.9 per cent.

Shipments rose in 11 of 21 industries measured, accounting for 68 per cent of the total, Statistics Canada said.

The gains were largely driven by transportation equipment and chemicals.

Prices actually dipped, which meant volumes rose 1 per cent, the agency said.

“Note that U.S. auto sales have been tailing off, so autos, which accounted for more than half of this month's gain, could see a giveback in the months ahead,” said CIBC World Markets chief economist Avery Shenfeld.

Story continues below advertisement

“Still, the data give some upside to our Q3 GDP forecast, and underscore that the Bank of Canada is positioned to hike in October as long as NAFTA talks don’t blow up.”

More news
Inside the Market
In case you missed it

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies