Technology: Low rates to underpin, not revive, Canada's housing market: Reuters poll - PressFrom - Canada
  •   
  •   
  •   

TechnologyLow rates to underpin, not revive, Canada's housing market: Reuters poll

07:40  21 may  2019
07:40  21 may  2019 Source:   reuters.com

North America’s Most Affordable Major Housing Market Is .. Calgary

North America’s Most Affordable Major Housing Market Is .. Calgary Affordable housing might be the one reason Canadians still envy their southern neighbours these days (a four-bedroom villa in Houston for $300,000, anyone?), but it turns out there may be nothing to envy there, either. 

Canada ' s real estate market is expected to slow further, with rising interest rates and more stringent mortgage The median forecast in a Reuters poll of 16 analysts taken Sept. 4-7 predicted national house prices However, some economists are concerned that even with rates as low as 1.5 percent

Follow the latest polls from Reuters .

Low rates to underpin, not revive, Canada's housing market: Reuters poll© Reuters/Chris Helgren FILE PHOTO: A row of houses under construction are seen at a subdivision near the town of Kleinburg

(Reuters) - Canada's housing market will stay stuck in the doldrums, with average prices stagnating this year and then rising 1.7% next year, hardly keeping pace with inflation, a Reuters poll of economists and property market experts showed.

Average house prices in Toronto and Vancouver, hotspots of double-digit rises in recent years, will rise just 1.3% and fall 4% respectively this year despite nearly no prospect of a further rise in the Bank of Canada's 1.75% overnight rate.

The latest survey is further evidence boom times are well and truly over, showing activity in Canada's property market much more in line with global trends, where prices are struggling to go much higher even with low borrowing costs.

Housing Affordability Survey Finds It's Harder Than Ever To Go From Renting To Owning A Condo In Canada

Housing Affordability Survey Finds It's Harder Than Ever To Go From Renting To Owning A Condo In Canada Canada's housing crunch is like a game of whack-a-mole. Solve one problem, and another pops up somewhere else. Runaway price growth for single-family homes is a thing of the past in Toronto and Vancouver today, thanks to rising interest rates and tougher mortgage rules. But with prices still high, buyers have turned to other options. Or really the one other option that exists: condos. "Trouble is, this stronger demand for condos resulted in sharper price gains and affordability erosion," Royal Bank of Canada economists Craig Wright and Robert Hogue wrote in their latest affordability report, released on Thursday.

( Reuters ) - House prices in two of Canada ’ s biggest cities will, at best, keep pace with inflation next year along with the national market , according to a Reuters poll of property market analysts, who mostly said the days of huge price swings are over.

The U. S . housing market , already struggling with tight inventory and rising building costs, faces a fresh headwind as 30-year mortgage rates rise Housing sector sputters. Residential property sales in 2018 floundered due to low inventory and a land shortage for developers to build new homes.

"The major risk right now is with the overextended consumer," said Peter Norman, chief economist at Altus Group. "With interest rates now leveled off, this risk is sidelined but there continues to be stress in terms of the consumer's ability to take on increased spending."

While Canada property market experts are downbeat on Vancouver, where house prices have doubled in the last 15 years, they are mostly positive about demand for housing nationally and in Toronto, Canada's biggest city and financial capital.

The survey was conducted May 9-20.

A plurality of analysts, 10, said demand will increase nationwide this year, compared with six who predict no change and three who expect a decrease. For Toronto, where many new immigrants arrive to live, those numbers were 12, five and one, respectively.

Vancouver Detached Home Prices Drop By $170,000, And The Industry Is Blaming Government

Vancouver Detached Home Prices Drop By $170,000, And The Industry Is Blaming Government Vancouver's closely-watched housing market clocked another weak month in March, with sales falling to their lowest level since 1986. Only 1,727 homes changed hands in Greater Vancouver in March, down 31.4 per cent from the same month a year earlier, the Real Estate Board of Greater Vancouver said Tuesday. Prices for all housing types are falling. The benchmark price of a detached home clocked in at $1.437 million, down 10.5 per cent, or about $170,000, in a year. Condo prices are down 5.9 per cent in a year, to $656,900. The industry's growing frustration with government policies on housing was evident in the REBGV's latest report.

( Reuters ) - Growth of U. S . home prices will slow sharply next year along with economic momentum, according to a Reuters poll of property experts “ Housing market activity has experienced a marked slowdown since the start of the year, as rising mortgage interest rates , tax reform and moderating

( Reuters ) - The Bank of Canada will likely keep interest rates unchanged for even longer than had been A separate Reuters poll of foreign exchange strategists on Thursday forecast the Canadian dollar While another rate cut could further fuel Canada ’ s hot housing market , additional tightening

But for Vancouver, only six property experts expected an increase in demand, with three seeing no change and nine forecasting a decrease this year.

"Demand for housing is improving but is also different. The growing number of atypical jobs, the improving integration of immigrants on the labor market and the preference of millennials are creating a strong demand for the rental market," said Sebastien Lavoie, chief economist at Laurentian Securities.

Most, however, agreed with BoC Governor Stephen Poloz's recent assessment that the housing market will bounce back to growth this year, outnumbering those who did not by 13 to six.

While that is perhaps not surprising given the recent abrupt softening in the interest rate outlook in Canada as well as the U.S. and many of Canada's trading partners, no analyst polled expected a return to recent boom times.

More than three times the number of analysts said the risks to the outlook were tilted more to the downside than the upside, by 14 to four.

The cost of housing in Toronto and Vancouver also remains prohibitively high. Robert Hogue, senior economist at RBC, called "affordability still at crisis levels" in those cities.

But TD economist Rishi Sondhi noted that "excluding the two priciest major markets would leave the national affordability measure much more in line with its history."

(Polling and reporting by Mumal Rathore and Sujith Pai in BENGALURU; Writing by Ross Finley in LONDON; Editing by Marguerita Choy)

Royal Bank CEO brushes off housing worries as profits jump amid loan growth.
Royal Bank CEO brushes off housing worries as profits jump amid loan growth

—   Share news in the SOC. Networks
usr: 1
This is interesting!