With interest rates remaining extraordinarily low until at least the summer, Canada’s housing boom will continue throughout the Spring.
Scotiabank predicts that most housing markets in Canada will remain a sellers’ market for the first half of the year as buyers try to beat the introduction of more stringent lending conditions and the HST in Ontario and Vancouver. The second half of the year will likely experience some cooling off as economists predict the Bank of Canada will raise rates between 0.5-1%
Scotiabank expects about 510,000 home sales this year, up 10 per cent from 2009, but just shy of the 2007 record. Average prices are forecast to increase about 8 per cent to a record $345,000, while housing starts are expected to reach 190,000, up from 149,000 last year. The Globe and Mail
Canada’s housing market recovery is going very well with the fourth quarter of 2009 up 19% year-over-year. Scotiabank further stated that worries about speculation were not necessarily backed by evidence indicating that supply and demand were determining housing prices rather than investors trying to make a quick buck.