Improved affordability lifts Canada's housing markets
Canadian housing markets are on the mend. Improved housing affordability has brought buyers back into the market and created momentum across the country; contributing to a more active and balanced housing market.
Key messages in RBC Economics' Housing Trends and Affordability report (July 2009) include:
- Housing affordability greatly improved in the first quarter of this year. This is the third consecutive quarterly improvement
- Affordability measures are returning to long term averages, which is consistent with more solid market fundamentals
- Improvement attributed to the federal government's aggressive policy action and Bank of Canada's rate cutting
- Property values are beginning to stabilize in many parts of the country.
Economic turnaround on the way
RBC'S Economic and Financial Outlook (June 2009): "Sun peaking out from behind the dark clouds" forecasts a return to positive growth for the Canadian economy in the latter part of 2009 and throughout 2010.
The Canadian and the U.S. housing markets are also showing signs of recovery. While Canadian housing starts are still down, sales of existing homes rose 11.2 per cent in April, marking the third solid monthly increase. This recent pick-up in activity is expected to continue throughout the rest of the year.
While not as strong as in Canada, signs of recovery in the U.S. housing market are also beginning to emerge. A reduction in the amount of unsold homes, decreased housing starts, and the government's "Making Homes Affordable" program are all contributing factors.
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