Photo: Steve Brown & John Verkleir/Flickr
While some market watchers have called for Toronto to lead Canadian real estate next year, a recent report from PwC Canada and the Urban Land Institute (ULI) suggests otherwise. Called Emerging Trends in Real Estate® 2017, it identifies Vancouver as the top Canadian housing market to watch next year, placing Toronto second.
Why give Vancouver the top spot? Put simply, PwC and ULI see a variety of factors creating an interesting Vancouver housing market situation in 2017. For one, they’ll be looking to see how the new foreign-buyer tax in Metro Vancouver will affect the market. They’ll also be observing how the housing landscape changes as developers shift their focus to building mixed-use developments and high-density condos.
According to John Bunting, partner and BC real estate leader at PwC, the Vancouver rental market will also be a key area to watch next year. Millennials are currently driving up demand for rental housing and the expectation is that record low rental vacancy rates will “continue until significantly more affordable supply comes on line.”
Chart: PwC/Urban Land Institute
Across the country in Toronto, other issues will be at play in 2017. In particular, PwC and ULI will be keeping an eye on what — if anything — the city does to deal with low housing supply and a lack of available land, two factors they say are currently pushing housing prices up in Toronto.
“With no real factors reducing demand, developers and builders will continue to face supply-side issues. Many respondents believe that government land use policies are a factor holding back supply. Some developers are also holding back on releasing new projects until all costs are fixed and to shorten the gap between sales and delivery; this will put more pressure on supply in the near future,” the report says.
Chart: PwC/Urban Land Institute
PwC and ULI also touch on the Canadian housing market as a whole, with one main takeaway being that despite the many different factors at play in Vancouver and Toronto, the country as a whole is expected to see stability next year. They expect the average housing price across Canada to fall 0.9 per cent in 2017 — that’s compared to growth of 10.6 percent in 2016.
They also outline six key trends that they expect to see throughout the country next year, including the development of more mixed-use projects, real estate firms becoming more tech-savvy and shifting attitudes toward long-term renting. Summing up the report’s findings, Frank Magliocco, partner and national real estate practice leader at PwC, said, “[o]pportunities in the Canadian market continue to be abundant but no two markets are the same.”
