The real estate market will continue to have its challenges in the coming year. Real estate transactions in Canada have been affected not only by higher interest rates, but also be the additional mortgage stress test that potential purchasers have had to, and will continue to have to, pass moving into 2019. The Canadian Real Estate Association (CREA) says the tighter rules brought the market down to earth this year.
In fact, CREA predicts that home sales in 2019 will decline to the lowest point ever in nine years. In more expensive markets, any hike in interest rates could mean the difference between affording a home and not. Even though the Bank of Canada is looking to normalize interest rates, some real estate experts say the market needs time to play catch up and any adjustments won't be felt until months down the line.
Bill B-20 will also continue to have an impact on market activity. In a nutshell, the bill expects every purchaser to pass a mortgage stress test, which means that purchasers have to be able to afford a mortgage at the Bank of Canada interest rate even though they may be able to secure a mortgage at a lower rate. Young buyers may find it tough going this coming year.
The good news for the Calgary area and most of Alberta is that median home prices are expected to drop, which may make buying a home attainable. Those involved in real estate transactions would benefit from the advice and guidance of a lawyer in Canada who can explain contracts in an easy-to-understand manner. The laws governing real estate can be complex and confusing and it may be best to get an experienced lawyer's input.