What is so surprising is the real estate market in Canada bounded back quicker than expected. In the spring of 2009, Canada saw the about face of the real estate market, we noticed sales figures continuing to climb in the following months. When we look at the winter months we see an even greater increase with reports of over a 100% jump. Normal prices exceeded the pre-crash level of the fourth quarter 2009.
Scrutinizing the Canadian market against the rest of the world, sees Canada doing much better and there are several reasons why. Speaking to the professionals, many say that this recovery is primarily due to the low interest rates put in place by the Bank of Canada. This low rate supported the Canadian real estate market and even though the US tried to do the same thing, they didn’t see the same results:
High risk loans for mortgages was common in the US unlikeCanada. Canada gave these subprime mortgages to between 5 and 10% of the borrowers, unlike the US who’s subprime loan market was a gigantic 22%.
Canadian banks are regularly held up as as the most secure in the world by the World Economic Forum. In addition, the solid financial position has also helped Canada avoid the subsequent credit crunch.
Even though jobs were lost and the unemployment figures increased, the figures were not as terrible as they were in the US and recovery has been seen since Summer 2009. Personal bankruptcies are smaller due to the social order in Canada
To sum up, the Canadian real estate market is on a steady footing. It is so positive, in fact, that there are people in the background whispering of a new and more dangerous real estate bubble ahead. From my own thoughts of the real estate market I don’t believe this for a minute.
The Bank of Canada gave word to keep the rates of interest stable until summer 2010. Of course we have already seen mortgage rates starting to increase and many professionals say we will see the rates increasing as the summer approaches. The First Time Home Buyers’ Tax Credit is going to stop soon, despite there is no official date it finishes it can’t stay for ever. We also have seen, the shortage of new properties listed, which we have been enduring since the autumn of 2009, is slowly letting up. Jay Banks of Vancouver Lofts says: “Over the last few months, the real estate market has seen an jump of new listings on property agent’s books, which has steadied the situation.”
More levelled sales and prices of properties settling at tolerable figures, is probably going to be the outcome of all these points starting to come together.
