At the end of 2017, we saw a nationwide increase in home sales as well as in housing inventory. Moncton, however, saw a spectacular, never-seen-before growth. If we take a look at national trends, it’s easy to see why there was such a significant increase in sales during December of 2017.
Why did we see such a substantial increase in sales during December?
A much-advertised change in mortgage regulations, particularly a new stress test that buyers have to meet, caused a large number of home buyers and seller to rush into the market. According to Jesus Machado, President of the Greater Moncton Realtors du Grand Moncton, “the 2017 year was a record year for home sales in the region. Since activity was strongest at the end of the year, we have great momentum heading into 2018. Combine that with falling supply, and it’s not a surprise we see solid price gains, particularly for single-family home types.”
Sure enough, Moncton recorded a record-breaking number of unit sales in 2017 in over 10 years for December, with a total of 162 units sold, which represents an increase of 10.2% over December of 2016. Throughout 2017 there were 2,925 residential units sold, which is the highest amount ever recorded in Moncton. On average, home sale prices in the Greater Moncton Area in December of 2017 increased by 6.8% compared to December of 2016. Over the whole year though, the average price for homes went up by 3.4% from 2016.
On a more detailed basis, semi-detached home prices were up by 7.2% in December 2017 compared to December 2016, while at the same time single-detached property prices went up by 6.4%. Apartment prices went up by 1.9%, whereas townhouse prices went down by 1.5%
Will this momentum carry well into 2018?
We can expect the recent increase in home sales to slow down at the beginning of 2018, as a product of the stricter mortgage regulations that came into effect in January. However, since there is a small residential units supply, a moderate demand, and very affordable home prices — especially when compared to larger metropolitan areas, such as Toronto, Vancouver, or even Ottawa — Moncton’s market won’t be as affected by the new mortgage stress tests as much.
If you missed your chance to sell your home during November or December, plan for another shot during the second half of 2018. Not every potential home buyer has the purchasing power they want, which is why we can expect a moderate increase in home sales during the second half on 2018, as more homebuyers save up enough for their required down payment. Also, because there is an expected increase in interest rates at the end of 2018, we can expect a general decrease in home affordability. It will affect Moncton, but again, it won’t be affected nearly as much as the rest of the country due to its affordable housing market.