22 May 2019

Together with high prices and debt levels, this hike will restrain prices, the firm says.

“Real estate prices growth will slow next year, then change its direction for a short time in 2021, and finally rebound”, – noted Andres Carbacho-Burgos from Moody’s Analytics.

This will of course improve affordability, as the incomes will have a possibility to catch up with the prices increase. However, as the wages are only slightly outpacing the inflation, such improvements will be quite modest.

According to Moody’s, Toronto will not face prices drops because of a strong demand, but the prices increase will remain at around 3.3% in the coming years.

Vancouver will keep the current pace level through 2024, Carbacho-Burgos says.

“Next year, only Montréal will show a modest price growth compared to other major areas. Nevertheless, later we’ll see a partial recovery, and Toronto will lead the way,” – he added.

Carbacho-Burgos also blames stricter housing market rules for the slowdown, although he thinks they prevented an even worse correction in the future, if affordability had become poorer and mortgage debts rose higher.

“So today’s cooling of the real estate market is not really bad news. It’s more of a necessary consequence.”