Guelph Mortgage and Housing Report Winter 2016
Based on data from the CMHC and Real Estate Board in Guelph, 2017 housing prices should continue to climb in Guelph, however will slow from 2016 rates. Construction of new homes will slow, especially for detached housing. However construction will increase for condo housing as part of Regional intensification initiatives. Mortgage rates will remain stable, and the CMHC does not suspect there will be any major shift in mortgage rates for the year 2017. These, along with the following factors will continue to support growth in Guelph housing in 2017.
Low unemployment in Guelph. The City of Guelph continues to enjoy the lowest employment rate in Canada, at under 5%. Specifically, the employment grew by 10% in 2015 and 1% in 2016. This strength of employment is driven by advanced manufacturing, health care and Government employment, will serve as a solid long term base for the Guelph real estate market. The CMHC predicts that the employment rates will remain relatively stable, but perhaps declining slightly given a higher dollar and potential US political factors. Guelph population is expected to grow by 1.2% in 2017 and 1.3% in 2018.
The Toronto and GTA effects. Due to Guelph’s close proximity to the GTA, it is increasingly becoming a purchase target for citizens of the Toronto area. This commuter population is also drawn by the community feel of Guelph. The GTA commuter population will combine with already strong local economy in Guelph to continue to push housing prices higher in 2017 and 2018, although at rates slightly lower than in 2016.
Rental Market High Vacancy. Guelph has one of the most competitive Rental markets in Ontario according to the CMHC. Vacancy rates will hold at 1.3% for 2016, and for 2017 and 2018 expand slightly into the the 1.4 % – 1.5% ranges. These incredibly low rental vacancy rates will continue to motivate first time home buyers in the area who’s alternative are relatively higher rental lease rates. Guelph will remain a healthy area for real estate investors to purchase rental properties in.
Mortgage Brokers Guelph. Mortgage Brokers in the Guelph area see mortgage rates remaining steady in the 3% range for 5 year fixed mortgage rates. Since the recent US election American and Canadian bond yields have increased which have in turn increased fixed mortgage rates in Canada. This said, mortgage rates in the mid 3% range still represent historical lows and will continue to support housing demand in Guelph. There is a low probability that 5 Year fixed mortgage rates will trend closer to 2% on the low end or to 4% on the higher end. Shorter terms and variable rate mortgage may provide rates closer to 2% in 2017 however if mortgage rates trend upwards over the mid term this could potentially result in higher mid to long term financing costs. Speak to your Guelph mortgage broker consultant for more information.