First, there’s no such thing as a Canadian real estate market. You buy one home on one street in one neighborhood in one city. This is true now more than ever.

What happens in Canada’s largest and hottest housing markets, Toronto and Vancouver, respectively, is quite different from that in, say, recovering areas such as Calgary and Edmonton.

“Monthly momentum for national home sales activity gained strength late last year, and further expected economic and job growth will buoy sales activity this year despite slightly higher expected interest rates,” Canadian Real Estate Association President Andrew Peck said on January 15 in releasing CREA’s stats for December 2017. “Even so, momentum for home sales differs depending on location and type.”

Indeed, it does.

“While activity remained below year-ago levels in the GTA, the decline there was more than offset by some sizable year-over-year gains in the Lower Mainland of British Columbia, Vancouver Island, Calgary, Edmonton, Ottawa and Montreal.”

Then there’s prices. The national average price climbed just 0.04 per cent in December from the previous month, but it declined 1.42 per cent in Oakville-Milton, Ont.

Looking at a longer-term trend is also important. Using the same Oakville-Milton example, prices were up 58 per cent in December from five years ago, while in Ottawa they’re up just 12.54 per cent, and in Saskatoon, they’re down 3.18 per cent.

The stress test

It will be more difficult to become a homeowner this year. As of January 1, borrowers with uninsured mortgages (those putting a down payment of 20 per cent or more) need to undergo a stress test. They must qualify at a new minimum rate: the greater of the Bank of Canada’s five-year benchmark rate of 4.99 per cent, or 200 basis points higher than their mortgage rate.

These new rules could reduce your purchasing power substantially.

At the qualifying rate of 4.99 per cent, a 20 per-cent down payment and 25-year amortization, here are the ballpark numbers you’re looking at to buy a home in these major Canadian markets.

Rising interest rates

It will also be more expensive to borrow money in 2018.

Sure enough, as of mid-January, Canada’s big banks began raising their benchmark five-year mortgage rates. And, as some experts expected, the Bank of Canada increased its overnight rate target to 1.25 per cent in its interest rate announcement and Monetary Policy Report on January 17.