Economist predicts return to average for Niagara home sales
After record-setting years for real estate sales in Niagara, a new report being developed by a national credit union predicts a slowdown in the demand for housing in years to come.
Edgard Navarrete, an economist from Central 1 Credit Union’s Ontario regional office, said homebuyers are “going to be a little more restrained in 2019 and 2020,” although the economy won’t see a “hard correction” economists had feared could occur.
Despite rebounding after provincial government policies such as the Ontario Fair Housing Plan as well as mortgage rule changes “put the brakes on housing demand,” Navarrete said the interest rate hike on Oct. 24 “and a couple more that should be coming” are expected to continue to slow down home sales.
“Population is going to continue to grow because Ontario, let’s face it, it’s an attractive province not only for work but also schools,” said Navarrete, who is authoring a report on real estate
in the Niagara and Hamilton areas. “But really, there are going to be people remaining on the sidelines.”
Navarrete said economists — himself included — were previously bracing for “a hard correction at some point with the housing market, and that’s going to trickle down through the rest of the economy.”
“That is not happening,” he said.
“What is happening is we’re going to have a soft landing. Basically, the key word is modest growth over the next couple of years.”
In many regions, he said, real estate markets “are going to be growing at their long-term average in terms of home sales.”
Meanwhile, he said housing prices are going to be growing at about the rate of inflation.
Monthly real estate sales data published last week by the Niagara Association of Realtors continue to show slight sales declines compared to previous year, dropping by 1.2 per cent in October compared to a year earlier.
Homes also took 10.3 per cent longer to sell last month, comtrends pared to October 2017, while the average residential sale price increased by eight per cent to $417,993.
Navarrete’s full report will be free to download from the Central 1 Credit Union’s website — central1.com — when it’s posted by the end of next week.