NEWS UPDATE: Federal Government Raises Insured Mortgage Cap to $1.5M, Expands 30-year Amortizations
Reasons Why The Canadian Real Estate Market Is Not As Bad As It May Seem
As we may have all realized by now, Canada’s real estate market is a never ending discussion because of changes taking place and its financial unpredictability. There is the constant worry that prices will keep going up, and less and less families will be able to afford homes. This week, it’s a shorter read, but still a very interesting one!
So what are the reasons to still be optimistic?
The ‘national trend’ in Canadian housing starts rose in July, despite a decrease in the level of seasonally adjusted annual rates from June
While Canadian housing starts fell to 222,000 annualized units in July, according to the latest CMHC data, a 9.6% drop from June, there are signs of a rebound.
“Residential construction activity remains rock solid in Canada, and combined with firming resale activity, will be something for the bank of Canada to keep in mind” – Douglas Porter, BMO chief economist.
- The residential sector made a positive contribution to quarterly growth for the first time since 2017
- British Colombia and Quebec saw the biggest drops at 15% to 50,857 and 8% to 47,857 respectively, but are still healthy. Quebec starts hit a 12 year high in the last 5 months.
- Other data points to an upturn in key markets: greater Vancouver saw a sales increase of 23.5% to 2,557, according to the real estate board of greater Vancouver.
- Ontario saw a bump of 4% combined with a 25% year over year jump in existing home sales.
- Sales in the Greater Toronto Area increased by 5.1% according to the Toronto real estate board
“We still don’t see Canada’s housing sector going back to its old ways of very strong growth, but a return to the positive column, supported by lower interest rates, is a welcome relief” – Josh Nye, Sr. economist, RBC economics research.
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