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2019 Real Estate Forecast

Posted by Shirley Arthur on Tuesday, January 8th, 2019 at 11:14am.

We all ask how the 2019 real estate forecast will look like. Right now it seems that it will be a similar year to last year with more homes on the market and less buyers looking.

Reasons for the 2019 Real Estate Forecast 

The number one reason for fewer buyers is the slow increase in mortgage rates which will continue this year. This makes it harder for millennial buyers who make up about 45% of new mortgages to step into the market.

Generation Xers who make up about 37% of mortgages have an easier time of it as they are moving up. They can use the equity from their current home and just add a mortgage payment which fits into their monthly budget to determine how much home they can afford. Many of these buyers bought just before the big real estate jump in prices so are sitting in a good position.

Baby Boomers who need mortgages make up the smallest percentage of mortgage borrowers at 17%. Many Boomers might be hard pressed to afford the interest increases which are inevitably coming. Many boomers have actually helped their kids with home ownership by taking some equity out of their houses and giving the money to their kids. Very noble, but if a mortgage was taken out to accomplish this then the boomer's monthly cost of living will have gone up. 

Results in the 2019 Real Estate Forecast  

The result of the new mortgage rules and increasing rates is a slowing of the market’s movement. More homes will stay on the market longer and as a result there may be a softening of prices. This can be good for buyers as there will become more choice and the homes on the market will generally be in much better repair so as to compete in the market. That said the decline is expected to be only about 2 - 3% on the market as a whole.

Because more buyers will be too financially strapped to purchase this year they will continue to rent. This will put more pressure on rental prices which in turn might make investment properties a very desirable purchase.

What the Government just Announced

So far this year the government has said it will keep the interest rates where they are because of the huge debt load most Canadians are carrying. This help not only the people with a debt but allow more first time buyers to get into the housing market. 

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