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By: Gord Hamilton The tide is turning in Canadian real estate markets with more moderate growth replacing the volatile price spikes that have characterized the hottest regions, says Dominion Lending Centres chief economist Dr. Sherry Cooper. She sees encouraging signs that the boom will not be followed by a bust. "It's a soft landing," she says. There are early signs of an upswing in the number of new listings in most Canadian real estate markets that is providing buyers with more choice, which Cooper sees as a sign that the real estate market is returning to more normal growth patterns. Her advice to sellers: The tide is turning. Don't wait any longer expecting prices to climb dramatically higher. Start making decisions to sell. For buyers, she says there is no need to panic that you are going to miss out. More supply is coming onto the market so don't get yourselves into competitive buying situations that could cause you to pay more than a property is worth. Ontario's Golden Horseshoe in particular witnessed a noticeable surge in new listings in the weeks leading up to the market-cooling measures announced April 20. Cooper expects price increases to moderate in the second half of the year, dropping to five per cent or less in 2018. Cooper also foresees no significant jump in interest rates this year, which remain at or near record lows. "I don't think the Bank of Canada is going to hike interest rates until maybe the middle of next year," she says. Nation-wide home sales are increasing - up 1.1 per cent from February to March - with centres like London and St. Thomas, Ontario showing growing strength. In Montreal, an improving economy has buoyed the housing market, where Cooper says a shortage of new listings has created "a bit of a seller's market." Prices are down slightly in Quebec, which, Canada Mortgage and Housing Corp. describes as a buyer's market. In Atlantic Canada, sales are generally steady and prices stable, with some exceptions, such as Halifax, where prices are up 2.6 per cent. In B.C., prices in the Lower Mainland have moderated after market-cooling measures were introduced last year, and sales activity is beginning to pick up. Alberta is experiencing the beginnings of a recovery from the downturn that followed the collapse in oil prices. The number of listings and rental vacancy rates is still higher than the long- term average in Calgary, but Cooper believes real estate prices have bottomed. Although oil prices have recently declined, oil production has likely bottomed with a return of job growth coming. That will moderate the current supply of home listings. Although real estate activity is driven by local conditions that create variations in supply, demand, and affordability across the country, national trends can provide important indicators. Cooper says there is a significant connection between what happens in the major housing markets and the Canadian economy as a whole. Housing as a percentage of GDP is at a record high. Affordability is still an issue in many major centres, and speculation on residential property remains a concern in the Greater Golden Horseshoe, but the overall trend of a return to moderate growth spells good news for the economy as a whole. Dominion Lending Centres Chief Economist, Dr. Sherry Cooper: Soft Landing Coming for Homebuyers 1-888-806-8080 www.dominionlending.ca Dr. Sherry Cooper Chief Economist for Dominion Lending Centres THURSDAY, MAY 25, 2017 • WATERLOO CHRONICLE • 17 BUSINESS Canada's hot housing market is having a cooling effect on potential homebuyers want- ing to enter the market for the � rst time. With housing prices trending higher, it is becoming increasingly difficult for first-timers to come up with enough funds for a down pay- ment -- that is why more and more first-timers are turning to relatives for help. According to a recent study, at ratehub.ca/blog/canadians-need- ed-financial-help-to-buy-a-home/, the percentage of Canadians who received � nancial help from relatives to get into the housing market in 2016 was 45 per cent in Québec, 42 per cent in B.C., 38 per cent in Alber- ta, 35 per cent in Ontario, 33 per cent in Manitoba and Saskatchewan, and 18 per cent in the Atlantic provinces. That's a lot of support, much of it coming from boomer parents mak- ing it financially possible for their adult kids to buy their first home. Add to this the new mortgage mea- sures introduced by the Department of Finance last fall, and the numbers may just increase. Under the new rules, all home- buyers seeking an insured mortgage will be subject to a mortgage rate stress test. Previous to this, only bor- rowers who opted for a variable-rate mortgages or fixed-rate mortgages with terms of less than five years were required to pass a stress test. The test measures whether the buyer could afford to make mort- gage payments in the event interest rates rise. � e stress test also requires a ceil- ing of no more than 39 per cent of household income being required to cover home-carrying costs such as mortgage payments, heat, and taxes. Some experts are predicting that the new rules will limit the options available to potential homebuyers -- especially those trying to break into the market for the � rst time. Buyers who might not be able to qualify under the new rules may need to scale back their dream home because the down payment they can afford is not enough to qualify for the mortgage amount they need, or look to other options: � nd more money for the down payment, or add another person to the mortgage. In both cases, that answer could be the assistance of a boomer parent. If you're planning to buy for the � rst time, sooner may be better than later to avoid even higher housing prices and/or mortgage rates. If you're a boomer parent or grandparent wanting to help your adult kids afford their first home, first find out how best to do that without undermining your own � nances. A good place to start? Hav- ing a conversation with your profes- sional adviser. ••• � is column is provided by McEachnie Group Private Wealth Management. Contact Russ McEach- nie, CFP,CPCA, CDFA, RRC, principal, at 886-2360, ext. 6241 or go to russmceachnie.com. Helping millennials buy � rst home in hot housing market RUSS McEACHNIE MAKIN' MONEY