What to expect from the housing market in fall 2019 and early 2020

The housing market is expected to improve for buyers and sellers over the next few months.

By Homicity

Oct 1, 2019

What to expect from the housing market in fall 2019 and early 2020

A lookback on 2019


Following the implementation of the mortgage stress test in 2018, the housing market has been steadily re-stabilizing itself throughout 2019. RBC's Canadian Housing Market Report indicates that the home sales market has had continuous growth since February.


Up until now, the Bank of Canada has kept the interest rate steady in 2019 rather than the predicted rate hikes. This was a relief to homeowners and homebuyers as increasing the overnight rate would affect mortgage rates and other interest rates.


As well, home buyers benefited from lower long-term mortgage rates. For the first time in almost three years, the Bank of Canada decreased its benchmark five-year mortgage rate. CREA’s Resale Housing Market Forecast argues that this was one of the most important developments because this is the rate that’s used in the stress test.


Other economic factors that influenced the housing market include steady population and employment growth.


What to expect in fall 2019 and early 2020


Improved housing affordability

The Bank of Canada lowering its benchmark rate means that Canadians applying for mortgages can qualify for more home. This helps to alleviate the financial burden for first-time homebuyers who also benefit from the recently launched First-Time Home Buyer Incentive.


Stable interest rates

The Bank of Canada believes that because housing activity has picked up with the support of lower mortgage rates that there is a risk of adding to high household debt levels. For this reason, it’s expected that the Bank of Canada will not raise interest rates for the time being. They will continue to keep a close eye on current global economic conditions, including escalating trade conflicts that can impact Canada’s economy.


Increased sales activity

CREA anticipates that the national average home price will stabilize in 2019 and continue to increase in 2020. Although sales activity is predicted to improve, it will still be lower than before the implementation of the stress test. It’s also expected that sales in British Columbia will decrease in 2019, but this will be offset by sales increases in Ontario and Quebec.


Our advice


As the housing market is forecasted to rebound, there is good news for homebuyers, home sellers, and homeowners!


Looking to buy a home? Research the cost of buying a home in your city, save up and secure a pre-approved mortgage, then start your search for your perfect home.


Planning to sell your home? See our step-by-step plan to help make the process as easy as possible.


Are you a homeowner? Capitalize on the low interest rates and pay off your mortgage faster. Or, if your financial situation allows, refinance to get a better term or interest rate.


Homicity helps you find your dream home in the perfect community. Whether you are buying, renting, or selling, you can navigate the Canadian real estate market with confidence with our expert advice, market news, and recommendations powered by AI.

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