Prices to rise with shift to homes from condos

TORONTO Canadian house prices are forecast to increase by 3.2 per cent next year led by Montreal, Ottawa and Toronto as millennials shifting from condominiums spur demand alongside immigration and the waning impact of mortgage restrictions introduced last year, real estate agency Royal LePage says.

The price of a two-storey detached house in Montreal may jump by six per cent in 2020 to $581,300 in the fourth consecutive year of gains above the four-per-cent level driven by positive economic indicators and a sellers market, the agency said Thursday in its market forecast.

The corresponding price in Toronto may increase by 4.5 per cent to $1,027,200 next year as a low supply and growing population drive demand, Royal LePage said. Ottawa may see a five-per-cent hike to $547,600 as government stability and growth in the high-tech sector benefit the market, it said.

“The oldest peak millennials are now in their 30s,” Phil Soper, Royal LePage president and CEO, said in a statement.

“With kids in hand and dog on leash, these parents are now eyeing the suburbs that their baby boomer parents so coveted. We predict that the period of disproportionately higher price appreciation in the condo segment is drawing to a close as interest in detached homes is reborn.”

Still, the agency forecast median prices for condominiums would increase next year by six per cent in Toronto, five per cent in Montreal, 3.5 per cent in Ottawa and three per cent in Vancouver.

Price increases in the rest of the country were subdued, with the price for a two-storey detached house in Vancouver forecast to rise by 1.25 per cent to $1,460,700, in Calgary by 1.75 per cent to $523,100, in Edmonton by 0.75 per cent to $438,700 and in Halifax by 1.25 per cent to $340,600, the agency said.

Alberta’s market continues to struggle along with the energy sector’s woes although movement on pipelines and corporate tax cuts to attract business and employment could prove positive, according to Corinne Lyall, owner of Royal LePage Benchmark in Calgary, and Tom Shearer, owner of Royal LePage Noralta Real Estate in Edmonton.

“Calgary’s housing market will see some buoyancy but it’s not going to be immediate,” Lyall said.

“We should still see more buyers entering the market this next year with continued low interest rates, positive migration, and less choice to rent with tighter vacancy rates.”

Shearer said: “Sellers are compromising and buyers are realizing that prices are not going any lower’. In 2020, we should see a modest price bump but we are also expecting a healthy gain in sales activity.” Prices in Winnipeg and Regina for two-storey detached homes are expected to fall next year by 0.25 per cent and 0.5 per cent to $322,600 and $386,000, respectively, the only places in the nine-city survey slated for decreases. Oversupply in Regina was cited as one reason