Canada’s Real Estate Market Solid for 2008
Canadians and international investors alike have been worried that Canada’s future in real estate may be adversely affected by the current economic trends of its neighbours to the south. However, while it’s certainly no secret that the Unites States is facing some serious problems in this aspect of its economy, Canada can afford to be a little optimistic. As February approaches and Canadians look forward to spring weather, it looks like their real estate market can expect a sunny forecast, as well.
Confidence in The Strength of Canadian Real Estate
In 2007, the US residential housing market Fell by a staggering 13%. American home sales haven’t fallen by that much since 1982. By contrast, Canada’s residential sales rose by a temperate 7.6%. Experts say that this number reveals buyers’ overall confidence in the strength of the Canadian real estate market . It’s a confidence that’s well-founded; although housing prices have risen dramatically in many of Canada’s cities, the Bank of Canada has dropped interest rates accordingly, in an effort to keep purchasing a home affordable.
A Valuable Lesson from The United States
It seems that Canada has learned a valuable lesson from the United States: it’s important to temper growth and keep mortgages within reasonable reach of residential buyers. While it’s true that Canadians have seen some price spikes in the last year, it’s expected that housing prices will level off in 2008 or, in many cases, actually decline. It’s not a bad thing; the real valuation of houses and mortgages means that Canada’s real estate market should correct any over-inflated prices in due course. Any Canadian who finds that the value of their home is currently decreasing has also likely experienced abnormally high growth rates in value over the last two or so years. For example, a young Canadian’s condominium that went from $100,000 to $220,000 in two years and is now dropping in value to around $175,000 is likely an indicator of real estate market health, not decay.
Lower Selling Prices Mean Good Deals
With housing prices dropping to reasonable levels that more accurately reflect property values, home buyers and investors alike should be celebrating. 2008 will likely be a great time to buy all over the country. Lower interest rates and lower selling prices mean good deals and the occasional hidden gem for buyers. For now, it appears that Canada’s real estate market is all blue skies and sunshine.
