The housing market in Canada has been the country’s main economic driver since the recession. Housing industry jobs (real estate agents, construction workers, home stagers, etc.) have surged 77%, nearly 10 times the country’s overall job growth.
There are some 48,000 real estate agents alone as of 2017! (Compare that number to the some 13,500 realtors in Chicago, according to the Chicago Association of Realtors.) Jobs specifically in home construction in Canada currently employ 1M people…more people than the oil and gas and mining sectors combined.
The problem? Nation-wide home re-sales dropped -6.7% in June 2017, the largest monthly drop since 2010 and the third consecutive monthly decline.
The Canadian Real Estate Association (CREA) this mid-September anticipated that sales in British Columbia and Ontario would drop by 10% this year as compared with 2016. Nation-wide, CREA expects sales to drop -66% in all local markets, led by the Greater Toronto area.
Sifting through the numbers in specific markets (real estate is local, remember), CREA reported that
– Vancouver’s numbers increased +7.3% compared to July and up +21.3 than 2016
– Newfoundland and Labrador decreased -8.1%
– Saskatchewan decreased -4%
– Alberta may have nation’s biggest increase at +7.2%
– Quebec increased +5.4%
– New Brunswick increased +5.7%
– Manitoba and Quebec expected to set sales records in 2017
Obviously, Ontario and British Columbia are the heavy drags in the country’s overall housing market and real estate agents are already hurting. Brian Torry, general manager of Bosley Real Estate in Toronto said nearly 50% of his agents reported doing two transactions in 2016 and less than 33% reported doing five or more transactions,
Moody Analytics reported in their latest August 2017 study that the annual growth of sale prices had weakened as well. It’s now anticipated at+1.3%. Moody’s Andres Carbacho-Burges said that sellers should factor in a “retrenchment” in price growth over the next 5 years. “Retrenchment expectations are due to a combination of restricted mortgage lending, taxes on foreign investment in the large metro areas, and expectations that interest rates will rise.”