Home Prices in major Canadian Markets have shown some moderation with the exception of Toronto, where prices have continued to overrun average family incomes, which were moving at 2% annual growth rates over the past few years.
“Consequently, affordability continues to deteriorate even with relatively steady and low interest rates. While Vancouver remains the least affordable city in Canada, some softening in prices there has allowed Toronto to rapidly narrow the gap.”
“A third consecutive monthly decline brought housing and condo starts to their lowest level since April 2013, though bad weather in January and December may have weighed on readings in those months. As such, we may see some recovery in the next few months as weather normalizes …
However, we expect modestly higher interest rates as 2014 progresses will weigh on housing affordability and lead to some moderation in residential building activity going forward. We forecast housing and condo starts of 182,000 in 2014, down only slightly from the 187,000 units in 2013 though well below the 195,000 average seen in the second half of last year.