Home prices growth in Canada may remain moderate during the next two years
The recent Reuters survey of analysts shows that once hot real estate market of Canada has been successfully cooled down. Home prices will keep growing nationally and in the main markets, but they will not outpace the overall inflation during the next two years.
Although a moderate price decline is already seen in Toronto and Vancouver, the new survey of 20 analysts shows the possibility of a national correction is only 20%.
Specialists expect home prices to go up by only 1.1% this year. The expected increase in 2020 is 1.9%, and in 2021 – about 3%.
In case of Toronto, the numbers are almost the same: 1.3%, 2.0% and 3.5%. Vancouver may show a 1.0% decline this year, followed by a 0.2% gain next year and 3.0% increase in 2021.
The reason why we see such a change after many years of sharp prices growth is demand, not only supply issue or cheap mortgage costs.
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Political leaders offer more measures on improving housing affordability
NDP Leader Jagmeet Singh explained how his party could improve housing affordability for young Canadians.
On Wednesday, Singh suggested two new measures should be taken in order to solve the housing crisis.
He wants the Canada Mortgage and Housing Corporation (CMHC) to support co-housing as one of the available mortgage variants.
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Should we expect a rate hike from the central bank in March?
With today’s economic challenges – weak real estate market, difficulties with oil and trade sectors – the Bank of Canada will hardly raise its key lending rate at its next meeting in March, says DLC chief economist Sherry Cooper.
“While the job growth turned out to be better than expected, wage increase moderated and inflation pressures are restrained,” - Cooper noted.
Although the most popular markets will keep facing home prices growth, those gains will be weaker than during the previous years. In addition to it, they may be partially offset by significant declines in other regions.
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