The Price of Owning a Home in Canada Expected to go down in 2018

The prices of owning a home in Canada are expected to drop significantly in the coming year of 2018. This will be as a result of tighter rules fort mortgage financing and a scheduled hike in interest rates. The inflation of interest rates is expected to have a ripple effect of dampening a mortgage market that has been flooded by cheap borrowing. While the prices of owning a home in Vancouver and Toronto are expected to go down, the average price in these two major cities is, however, likely to be above the national average.

The prices in the two cities are expected to be above board despite local government efforts to make in-roads in the two competitive markets. The housing market in Canada has experienced years of vibrant activity since the financial crisis of 2008 that hit almost all the major economies of the world. The robust housing market has triggered economic growth but also led to increased household debt compared to the average family income. Financial analysts and economists are giving an eye on how the consumers with household debt will cope at the beginning of the coming year. This is after an expected hike in household interest rates by the bank of Canada and the stricter regulations on mortgage borrowing which will take effect early next year.

The prices for buying a home are only expected to inflate by 1.9% in the coming year as compared to 8.5% in 2017 alone. The inflation in home ownership prices is expected to pick slightly from the 2018 figure to an increase3 of 2.65 in 2019. According to, there is likely to be a significant impact on the most expensive mortgage markets due to the expected change in mortgage rules imposed by the banking regulators in Canada.

The difference in regulations is expected to have a considerable effect on the higher priced mortgages of Vancouver and Toronto. A large number of credit unions in British Columbia may dilute the impact the change in rules would have on the province’s mortgage market. The homeownership prices in Toronto are expected to inflate by 2% in 2018 and increase to 35 in 2019.

Since the announcement of measures to curb the increased homeownership rates in Toronto by the Ontario government, the rates are expected to dive from 30% to sustainable levels for the average income Canadian. Ontario government measures include the implementation of an additional tax to foreign buyers.

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About the Author: Nick Callen

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