While no one has yet invented a functioning crystal ball capable of predicting the future, economists often crunch the numbers on unemployment rates, new housing starts, inflation, interest rates and other key figures to make educated guesses at what the near future has in store for the housing market. Here’s a rundown of what the experts expect for 2017, plus a look at some new trends in home construction and renovations.
Bank of Canada and Interest Rates
On September 7, the Bank of Canada made its regular interest rate announcement, leaving things unchanged at 0.5 per cent for the overnight rate – where it has been since July 2015.
The bank cited a “weaker than expected” U.S. economy and a shrinking Canadian economy in the first half of the year as reasons for maintaining the status quo. However, the BoC projects “a substantial rebound in the second half of this year,” indicating a potential rate hike down the road.
The next BoC interest rate announcement is scheduled for October 19. Potential buyers who don’t already have a rate locked in with their lender may want to have a conversation with their broker prior to that date, or before the next scheduled announcement on December 7 to ensure they get in ahead of any rate hikes.
The Big Banks’ Take on the Housing Market
In the September 2016 Canadian Housing Health Check, RBC Economics’ analysts predict that, at a national level, “there is a low probability of a wide-spread and steep downturn in Canada’s housing market in the next 12 months.” That said, they do highlight overheating concerns in Vancouver and Toronto, and the ongoing downturn in the energy sector as cause for concern in the Calgary market.
Also last month, Scotiabank’s Adrienne Warren released her Housing News Flash. While acknowledging that real estate remains a seller’s market in many regions, Warren sees “signs of softening” nationwide, with “cooling […] most evident in Greater Vancouver”. She cites B.C.’s new tax on foreign buyers as seeming to have the government’s desired effect of slowing things down.
Even the Canadian Real Estate Association has acknowledged that the Vancouver market has “braked more abruptly than anticipated.” In short, first-time buyers in Toronto and Vancouver may want to hold off for the short-term in anticipation of slightly better market conditions from the buyer’s perspective, down the line.
The Trump Card
The seemingly never-ending U.S. election cycle will finally wrap up on election day, Tuesday, Nov. 8. The result could have major implications for the global economy, with everyone from the New York Times and the Economist magazine to former Republican presidential nominee Mitt Romney and Barbara Bush – wife and mother to former Republican presidents expressing their concerns about both candidates running for president.
If Trump wins and follows through on pulling out of various trade treaties and implement new tariffs and restrictions on trade, the economic forecasters will likely have to go back to the drawing board.
Three Hot Design Trends for 2017
Let’s lighten the mood now and go over what we can expect in the home design department:
Home Automation: The next big thing in home renovations appears to be home automation. Already, many homeowners can adjust their thermostats, monitor home security systems and remotely open doors via apps on their phones. But so-called “smart homes” will also soon feature appliances that you can start from afar, or can contact the manufacturer directly to diagnose service issues.
Tiny Houses: With the cost of housing continuing to soar, many builders and would-be buyers are thinking small. Smaller houses, that is. From DIY cabins, to prefab manufacturers fashioning houses out of old shipping containers, a smaller footprint will increasingly become a way for buyers to get their foot in the door. The trend has also extended to condos; for example, the Smart House condo project currently under construction in Toronto has units that are as small as 289-sq.ft.
Colour Confident: Every year, paint manufacturers consult with interior designs and other trendsetters to find out what the hottest colours will be in the coming year. Of course, the main goal is to sell more paint and make sure they have plenty of supply in stock.
CIL predicts that in 2017, homeowners will opt for soft, mellow shades of violet, grey, sand, terracotta, mustard and grey-green. Meanwhile, SICO predicts a lot of colour-contrasts. “Energetic brights sit next to muted midtones; classic reds and blues bump into mixed blue-greens and green-yellows; and clean colours join greyed ones,” said brand manager Geneviève Paiement in a press release. Finally, DULUX has chosen Starry Sky Purple, which is described as “a midtone greyed-off violet,” as its colour of the year for 2017.
Is buying a home in your plans for 2017? Don’t forget to get pre-approved for a mortgage prior to starting your search. Compare the best fixed and variable mortgage rates today!