What is happening in 2013!

This past year was challenging for the Canadian housing market. Mortgage rule changes, which include a reduction in the amortization period to 25 years; limits on refinances to 80% of the value of the home; and changes to home equity lines of credit have slowed the pace of sales. Some first time home buyers have withdrawn from the marketplace. In various parts of the country listings have decreased, which has affected some who want to move but can’t due to a lack of inventory.


Not all areas of the country are experiencing slowed sales and it is not all gloom for 2013. The Canadian Real Estate Association (CREA) is predicting that national sales activity will recede by only two per cent to 447,400 units. The national average price is forecast to edge up another three tenths of one per cent to $365,100 in 2013, with British Columbia, Ontario, and New Brunswick registering small price declines and modest average price gains in line with or below inflation in other provinces.Moderation is the buzz word when discussing the other positives. The economy is still creating jobs and the US economy has recently shown improved job creation. If this persists, it will contribute to faster job creation in Canada.The inflation rate fell to a three-year low in November and interest rates remain at historical lows. Moderate economic, job, and income growth will temper the impact of recent mortgage rule changes, which are not expected to dampen activity much more.It also appears Canadians will be entering 2013 in a more positive mood about their finances than they were a year ago. The Harris-Decima poll released last month found that 70% of those surveyed were feeling positive about their current financial situation – up six percentage points from a similar survey conducted in late 2011.

A few economists say that it is certainly possible for the economy to grow in 2013 as long as situations in other countries improve. Doug Porter, Bank of Montreal’s chief economist is one of them. He said the US housing sector is turning the corner and that country’s auto sales are getting back to almost normal, which would have a huge positive impact for the Canadian economy. The Royal Bank of Canada has the economy picking up steam in each of the first three quarters of 2013, starting with a 2.4 per cent gain in the first quarter and peaking at 3.4 in the third, the summer months.Certainly the winds are shifting as the U.S., Europe and China make economic strides. Barring another major setback, those three sources of external strength will help lift Canada’s economy.


Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta).