Toronto housing market headed for cool down, BMO predicts

Vancouver’s hot housing market is headed for a cool down in 2012. So is Toronto’s.
But prepare for oil prices — and Alberta’s distinction as the strongest employment market in Canada in 2011 — to propel Calgary and Edmonton to the top two spots next year, according to a bold prediction by BMO Economics.
“Assuming oil prices hold around $90 or better, look for those two cities to lead the way for the hottest housing markets in 2012,” says BMO Deputy Chief Economist Doug Porter.
But GDP growth of just 2 per cent next year, slowing job growth and record-high household debt makes it highly unlikely that we’ll see a repeat of this year’s “surprisingly perky performance” of Canada’s housing market overall, warns Porter in a report.

Leading the way was Vancouver where house sales were up 16 per cent in November 2011 over a year earlier as the seasonally adjusted price of a house hit $756,512.
“That won’t be repeated next year — there are already clear signs that sales are dipping, and price increases are starting to ebb,” says the report.
“Toronto has seized the mantle of hottest major market in recent months, and appears to be at some risk of overheating.”
In second-place Toronto, home sales were up 9.7 per cent in November over a year earlier as the average house price surpassed $480,000 for the first time.

Calgary and Edmonton clearly have some catching up to do, given that their housing markets have remained flat over the last year, even as Alberta topped the rest of the country in job growth.

House prices there are a relative bargain with the average house selling for just $402,185 in Calgary and $326,741 in Edmonton in November, according to figures from the Canadian Real Estate Board.

 
Source: by Susan Pigg (Toronto Star)