Improving labour markets will support stronger home sales in 2015. A report by Marcus & Millichap Research says up to 51,000 new jobs were created in the GTA last year. It says there will be job gains in professional/scientific/managerial services, financial/insurance/real estate services, retail/wholesale trade and construction.
Canada Mortgage and Housing Corp. (CMHC) believes that as the U.S. economy improves, and with support from a weaker Canadian dollar, Ontario’s manufacturing industries will see improved employment prospects. Incomes are expected to increase modestly.
In the GTA, fewer people are leaving the area to seek work out west. Immigration will be higher than its historic average and will boost population growth and housing demand.
A new federal immigration program will make it easier for employers to find skilled labour and qualified immigrants will be able to settle faster “and ultimately enter the homeownership market,” says CMHC. Perhaps most importantly, the federal housing agency says, “We do not expect interest rate increases before the latter part of 2015 in both Canada and the United States. Inflation remains under control in both countries.”
CMHC’s forecast indicates that Toronto will set a new all-time record for home sales in 2015, when 96,000 transactions are expected. This year the federal housing agency predicts prices will rise by 2.2 per cent and in 2016 by another 1.8 per cent, when mortgage rate hikes are expected to start slowing down the market. CMHC also predicts that more listings on the market will begin to put a drag on price growth, which will be good news for those who are saving up for a down payment.
Overall, new listings in the GTA for all home types were down by 5.3 per cent in November compared to one year ago and active listings were down by 8.5 per cent. Figures from the Toronto Real Estate Board (TREB) show that in November, the average price of a detached home in the City of Toronto was $935,122 – an increase of 9.4 per cent compared to the same time period a year ago. In the 905 regions, the average detached home price in November was $672,825, up 10.6 per cent from a year ago.
Semi-detached home sales averaged $667,178 in the city and $449,429 in the 905 regions during November. “The robust average price growth experienced throughout 2014 has been fundamentally sound, with demand high relative to supply. Strong competition between buyers has exerted upward pressure on selling prices,” says Jason Mercer, director of market analysis for TREB. “Barring a substantial shift in the relationship between sales and listings in the GTA, price growth is expected to continue through 2015.”