Real estate in Alberta is set to begin a turnaround this year, in the view of one major real estate firm.
Zoocasa, a full-service real estate brokerage that offers advanced online search tools, predicts 2020 sales will hit between 52,300 to 56,900 units (+4.1 to 4.2 per cent), while prices will inch up to the $379,700 to $383,400 range (+1.9 to 2.9 per cent).
The Bank of Canada kept mortgage interest rates relatively low and stable for 2019, keeping its trend-setting overnight lending rate at 1.75 per cent in each of its eight announcements, Zoocasa notes.
“As a result, banks and credit unions were able to keep their variable mortgage and line of credit products competitively priced,” said the company. “As well, yields for national bonds, which lenders use to set the cost of fixed-rate borrowing, hit historic lows, indicating increased popularity with no imminent risk of a devaluing rate hike on the horizon.
As a result, states Zoocasa, borrowers have had access to some of the lowest mortgage rates on record in 2019, and the trend is likely to persist throughout the new year, according to the Bank of Canada.
“In the bank’s year-end speech, Governor Stephen Poloz outlined the major long-term forces that will shape the economy and interest rates over the next year – and they look to stick to status quo.”
Zoocasa also noted that Finance Minister Bill Morneau will take a second look at the controversial mortgage stress test’s criteria, and potentially make tweaks to allow for more flexibility when qualifying borrowers.
“. . . This could include lowering the qualifying rate from its current 5.19 per cent, or making it more dynamic based on individual borrowers’ profiles.
“As well, they could remove the current requirement for borrowers to be re-stress tested when switching lenders, a measure that has drawn heavy criticism from the mortgage industry for discouraging consumer empowerment and competitiveness,” stated Zoocasa.
Mario Toneguzzi is a business reporter in Calgary.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
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