14 July 2014
As you know, discussions about the possible bubble burst at the Canadian real estate market are still among the hottest topics, but for now there are no signs of this scenario happening.
In fact, the majority of analysts, including the central bank, expect a soft landing, although with price hikes, sales and starts flatting or falling only moderately. Nevertheless, David Madani of Capital Economics warns that the longer the correction is delayed, the sharper it will be later.
“In our opinion, high household debt relative to disposable income has made the housing market more vulnerable to unemployment growth or interest rate increases,” – Fitch says. “We believe the Canadian government has already taken several measures aimed at mitigating the risks to real estate market. Nevertheless, we can’t be sure about the longer-term influence, so additional measures may be required in the nearest future for providing the necessary soft landing”.
We will monitor the situation closely and provide with all updates on potential lending changes and tightening, which might affect your ability to purchase a home or refinance your existing mortgage