Canada’s Property Market Continues to Heat Up
Posted by: Lilian in Untagged on Mar , 2010
The Canadian real estate market has continued to heat up, which has real estate agents, brokers and investments breathing a sigh of relief all across the country.
In February, new housing starts rose faster than expected and according to a new survey, 10% of Canadians expect to buy a home in the next two years.
Seasonally adjusted new housing starts landed at 196,700 in February, up from 185,400 in January and above analysts’ forecasts for a 190,000 gain; according to figures from the Canadian Mortgage Housing Corporation.
RBC’s 17th annual home ownership study found that the number of Canadians who say they are very likely to buy a new home rose from 7% two years ago to 10%. The number of people who view their homes as a good investment rose to a 12-year high of 91%.
Some economists believe that the property market will cool in the second half as the Bank of Canada is expected to being raising interest rates and the demand and supply of available housing becomes more balanced.
According to statistics, urban multiple starts, or condos, increased by 19.1% to 89,900 units so far this year while single urban starts increased by 0.5% to 89,200 units.
Urban starts rose 28.6% in Ontario, 14.3% in Atlantic Canada, 10.8% in the Prairie region and 8% in British Columbia. In Quebec, however, urban starts dropped 14.1%.
Rural starts were estimated at a seasonally adjusted annual rate of 17,600 units in February.
According to the RBC poll, younger Canadians between the ages of 18 to 24 are most likely to lead the market. About 15% said they were likely to buy, almost double the number in 2009.
About 60% also believe housing prices will continue to rise this year, up from a mere 25% this time a year ago. They also expect mortgage rates to rise, with two-thirds expecting to have to pay more, the bank said.
That belief is being reflected in the choice of mortgage, with 16% opting for a variable rate loan compared with 20% last year.
