Since oil has dropped to less than $30 per barrel and the Canadian dollar reaching its lowest levels in 15 years, the stressed Canadian economy is struggling to achieve stability this year despite the continued drive in the country’s real estate markets. Housing prices will rise approximately 10% this year. The surging demand in high-volume locations like the Greater Toronto Area will play a critical role in the increase in how the real estate market this year.
Analysts say that the continued downturn of the Canadian energy sector will determine this year’s real estate trends. Certain oil producing countries and companies have flooded the market with a surplus of supply, decreasing the cost of crude oil. As a result it’s been a downhill slide for the Canadian sector, which plays a significant role for the national economy. When Canadians loose their jobs, the real estate market suffers.
What complicates matter is the increasing presence of foreign capital, especially since the weak loonie affects the exchange rates that make domestic market attractive to international investors. For those who own property, increased foreign investment has been welcomed as they have seen their own property value increase. For the majority of Canadians who rent, foreign investment means increased real estate prices that already seem unaffordable. As long as borrowing money is cheap, real estate prices won’t be. For those who are priced out of the housing market, while rents have also risen across the country, it is the only option for many.
Source: Canadian Real Estate Wealth
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4