Real estate in Canada is surging ahead of other markets, but analysts warn the country’s population growth will continue to slow as the country begins to transition to a new economic model.
The Toronto-Dominion Bank forecast Tuesday that real estate sales in Canada will rise 1.4 per cent this year and 1.7 per cent in 2018.
Sales of condominiums will jump 3.7 to 3.9 per cent, according to a survey by brokerage Hometrack.
Sales for rental units will also rise 1 per cent.
But analysts are also concerned about the long-term outlook.
The Bank of Montreal forecasted that Canada’s population will continue its decline in 2031, declining by one million to 6.2 million.
It said the country will have to continue to support households by reducing its reliance on the welfare state to generate economic growth.
The bank also said that Canada would have to make further structural changes in its tax system to balance its budget.
The real estate sector is expected to grow at an annual rate of 7.2 per cent for the next 10 years, while the industry is forecast to contract by 0.2 to 0.4 percentage points this year.
The median price of a condo in Toronto is up 8.4 percent in 2017, to $1.4 million, according the Real Estate Board of Greater Toronto.
But that is more than twice the average annual growth rate for the sector, which rose 2.6 percent to $2.7 million last year.
The average annual price of single-family homes in Toronto jumped 2.9 percent to a record $1 million last month.