Re/Max forecasts no change in the average price of GTA homes in 2018 compared with 2017, although some areas, including central Toronto, will likely see price gains.Melissa Renwick/The Globe and Mail
The Greater Toronto Area is facing a flat year for home prices on average in 2018, although downtown Toronto and some suburban communities will see higher prices, according to a new forecast.
A 2018 housing forecast from Re/Max predicts average national home prices will increase by 2.5 per cent next year. National gains will be held down by weakness in the GTA, where Re/Max forecasts no change in home prices in 2018 compared with 2017.
The forecast is more pessimistic than one released earlier this week by realty firm Royal LePage, which predicted a 4.9-per-cent national price increase next year and a price increase of 6.8 per cent in the GTA.
Christopher Alexander, regional director for Ontario and Atlantic Canada at Re/Max Integra, said pricing in the GTA will be uneven, with central Toronto and communities such as Brampton and Oakville likely to see price gains in 2018, while York Region north of the city of Toronto is likely to remain weak next year.
Communities in York region – including Richmond Hill, Markham and Aurora – have faced some of the biggest declines since the GTA housing market began a downturn in April, and the pressure is likely to continue into 2018, Mr. Alexander said.
"The north part of Toronto, like in Markham and Richmond Hill, had the biggest price run-up from 2016 into 2017," he said in an interview. "Aurora in the first quarter [of 2017] was up 50 per cent year over year. That's impossible to sustain."
Oakville, however, is expected to see prices rise 7.5 per cent next year, according to the Re/Max forecast. Mr. Alexander said there is still strong demand for housing in the town west of Toronto and that price increases in 2016 and early 2017 were less dramatic and therefore more sustainable, he argues.
Re/Max predicts Windsor-Essex in southwestern Ontario will have the greatest house-price gains in Canada next year, forecasting a 9-per-cent increase.
Mr. Alexander said Windsor is attracting more immigrants and more infrastructure investment, and could become even more attractive if the Ontario government proceeds with a proposed high-speed train in the corridor between Windsor and Toronto.
Re/Max predicts prices in Greater Vancouver will rise 6 per cent in 2018 as demand for condos continues to outpace supply, while prices in Montreal are expected to rise 7 per cent next year.
The report anticipates tougher new mortgage-qualification rules, which take effect Jan. 1, will slow real estate activity nationally in the first few months of next year and that Victoria, Greater Vancouver, Hamilton-Burlington, the GTA and Ottawa will be among the areas most heavily affected.