Thursday, June 26, 2014

The Canadian housing market resists while housing prices continue to rise

After several years of warnings about the Canadian housing market, home prices continue to increase, reaching new highs despite negative expectations and continuous alerts, the housing industry in the country continues its growth process.

Analysts claim that is not yet claim victory around the stability of the housing market, the concern exemplified in Toronto apartment sector, which, despite these positive expectations for anything, still exceeds the perception and growing .

Scotiabank economist Derek Holt said in a report published recently warned that "it is too early to relax around the Canadian housing market." For the specialist, it is necessary for the surveillance and monitoring continue.

Returning to the example of the Toronto market, statistics show that sales of new apartments were 22% higher than what was recorded 12 months ago. Prices, meanwhile, advanced 1% (although the specialists asserted in their forecasts that they would fall), and ranked, on average, $ 437,773, according to RealNet Canada Inc. This year alone has sold 8,305 condos in this city, representing an increase of 33% compared to 2013, which is 10% above the average of the last 10 years.

Analysts following the best results, insist that the theory indicates that no significant price falls will be in the coming months.

Meanwhile, experts warn that the real test for the country's property market will happen when interest rates rise.

In this panorama, there are those who also maintain his thesis that the risk of housing bubble has not completely ruled out, such as David Madani of Capital Economics, interviewed by The Globe and Mail. The problems are obvious, says Madani, arguing that exists in the market overvaluation, excessive new structures and high household debt.

The most pessimistic analysts point out that in the United States were in denial about the housing bubble that was recorded prior to the recession. Refer to the same time that the Canadian housing market remains more alert lit outside the country within the national territory, referring, of course, to warnings made ​​months ago by the IMF and OECD.

The Bank of Canada, meanwhile, said in its forecast earlier this month that a sharp correction in the housing market ranks first among the risks that currently has the Canadian financial system, emphasizing, in the same report, concerns about market condos in Toronto.

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