The Canadian housing market will not crash in the coming year
Contrary to what some economists are predicting for the coming year, the Canadian housing market is not going to crash. So, homeowner can take a deep breath and stop worrying about the future of their investments.
While housing prices have fallen over the past few months, this has largely occurred because of two major factors – some uncertainty about the world economy and the changes that have been made to the mortgage lending rules by the Federal Government.
The current state of the Canadian housing market
Canada is not in the same situation as the United States economy when it crashed after its boom from 2003-2007. While some are concerned that we may experience a US style housing bust, we believe this is unlikely.
In spite of shortening the amortization period on mortgages, interest rates continue to hover near record lows. What does this mean for Canadians? Canadians should expect to continue to see low interest rates, but they could begin to creep up a bit as we get closer to 2014.
Canadians should also expect to see positive growth in both the job market as well as personal income. These are both good signs for the house market. If more people have jobs, and their average salary continues to rise, they will be in a more financially sound situation. This helps to support the current housing market.
What does this mean for housing prices? Expect housing prices to remain relatively the same for the coming year. However, we could see a bit of a dip, but nothing that anyone should worry about. Prices should recover quickly if the market does experience a lag.
What Canadians can expect for 2013?
Since the economy is filled with monetary stimulus, Canadians should expect the housing market to be business as usual for the coming year. There will likely be a few minor dips, but they will be met with a quick recovery.