Is Canada facing a gloomy economic forecast? With the Loonie being the lowest its been in years and a barrel of gas is selling for less than $30. However there is one section of our economy that appears to be standing strong, as the real estate market shows little signs of slowing down on a national level.
Despite the economic forecast we shouldn’t expect any price breaks in Canada’s real estate market for 2016. The prediction for this market in fact, is an increase in the average price over a home to rise by nearly 10%.
Our housing market is coming off a truly remarkable run. However the following will some of the biggest factors affecting the housing markets in 2016.
Oil prices have hit all new lows we haven’t seen in decades as barrel prices have dropped by more than 60% since June of 2014. With barrels selling for less than $29 per barrel.
With the addition of a surplus of supplies being flooded in from certain oil producing countries and companies.
Though when our energy sector is in good shape you can be assured our real estate sector is as well. Particularity in Western Canada, however though, in our own province of BC the market is sky rocketing as housing costs in Vancouver continue to rise. Though Alberta is starting to feel it as well after experiencing numerous years in growth.
The Low Loonie
With the Canadian dollar being worth less than 70 cents to the US rate, a deficit we haven’t seen since 2003.
However depending on where you live within Canada these numbers may have different effects on your areas housing market.
Jobs are also being lost as many companies within Canada are feeling the strain from increased expenses.
This is unwelcoming as the loss of jobs inevitably will cause the real estate market to suffer as well.
Mortgage rates can’t get much lower, Mortgage rates are at the moment extremely affordable. Which makes things easier than ever for first time home buyers, especially in the smaller markets outside of the Big Three (Vancouver, Toronto, Montreal)
So long as borrowing money is cheap, Real Estate prices won’t be.So for those who are out priced within the housing markets. Especially while rent has also increased across the country , it is the only option unfortunatly for some.
Foreign investment in the Canadian Real estate market has always seemed to be a double edged sword. For owner the increase of foreign investments has been welcomed as they see their own property value increase. However for the majority of Canada which are renters foreign investors means even more increased prices for real estate that was already unaffordable.
Many residents of Vancouver of multiple years have been driven out of the city due to the over inflation of Real Estate.
It seems however whether we like it or not foreign investment does not seem to be going away any time soon with the current situation of the loonie.
Despite all of these rocky starts for 2016 the Real Estate market is remaining strong and isn’t showing any signs of slowing down.