Canada’s real estate market has held up better than their US neighbors, and more data suggests that they are already on the road to recovery. In May, year-over-year resale prices increased for the first time in a year and fear in the market seems to be waning. For more, see the following article from Property Wire.
The residential property market in Canada is showing signs of recovery but analysts are warning that it will be slow.
A rise in mortgage rates and high unemployment are just two of the factors that are likely to hold back prices and sales.
Property experts say that although first-time buyers and Bank of Canada rate cuts have helped restore stability to a market that slumped from late 2008 to early this year caution is still needed.
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‘We should be less fearful than we were six months ago, but I don’t think we should be exuberant yet. The resale markets in Canada are very strong. May figures were pretty good, and June numbers will be even better,’ said Will Dunning, an economic consultant who specializes in the housing market.
‘But by July and into the fall there will be an offset of considerably slower activity. I don’t think it’s likely to go off a cliff. It’ll depend on what happens in employment and the broader economy, and how that affects confidence,’ he added.
Indeed the latest data from the Canadian Real Estate Association suggest that Canada’s residential property market, which has withstood the financial crisis much better than its hard-hit US neighbor, has been showing signs of improvement for several months.
May resale home prices rose 0.4% to $319,757, topping the previous record set a year earlier and the first year-over-year increase since May last year. Also sales activity climbed for the fourth month in a row.
The association, which represents more than 97,000 real estate brokers and agents, now expects sales activity to continue improving.
Philip Soper, chief executive officer of Brookfield Real Estate Services, an arm of Canadian property giant Brookfield Properties, expects a period of stabilization over the next year.
Unemployment is one of the biggest dangers for the recovery. The jobless rate increased to an 11 year high in May.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news website.