Canadian real estate home prices is predicted to rise despite economic slowdown. The Reuters poll says that the home prices is expected to go higher at about 5% this 2015, and 2% in 2016 even if its activity has been slowing down.
Reuters Canada reports that the economy in Canada has begun to shrink in the first quarter this year , and it has continuously goes down in the month of April and June. Obviously, the main reason why the economy slows down is the slumping oil prices. But then despite that, home prices have defied the economic meltdown. The prices of the residential real estate have been continuously soaring up.
Based on the Reuters' survey conducted among 20 analysts, the result shows that home prices is expected to rise 5.2% this year. The forecasted result is 3.4% higher compared to the survey made in June. For the 2016 and 2017 price prediction, the figure has also been varied. The result reflects 2.0% and 2.3% from the previous figure of 1.3% and 1.7%. In addition, "Canada's Teranet-National Bank House Price Index was up 1.2 percent in July."
Mark Hopkins, senior economist at Moody's Analytics, describes the Canadian housing market as "bullet-proof," since it has defied the odds and has survived the huge downtrend in the global economy. He said that it is a bit strange that the existing home prices has increased still.
Globe And Mail says that majority of the analyst have predicted that the home buying activity will slowdown even if the Bank of Canada has enacted the 2 rate reductions this 2015. David Watt, chief economist at HSBC, says that despite the lowering rates of the Bank of Canada, the buying rate including the home renovation will decline because people will find it expensive to buy stuff.
It has also been noted that housing market has been "an important driver of the Canadian economy. It went in the opposite direction to the U.S. housing market crash and helped Canada brave the worst of the global financial crisis."
The Canadian real estate home prices is expected to increase even if there is an economic meltdown in the country. However, several economists hope that this concern will be corrected and home prices will begin to recover.
