Canada and more specifically Ontario appears to have avoided any lasting impact from the collapse of the US housing market and the subprime mortgage market meltdown. What we have seen over the past 18 months was fear versus demand and fair market values relative to the true economic environment in Ontario. From the price stability we have seen, I would say we are on great footing going forward.
The rational for Ontario home price appreciation in 2010 is as follows:
Ontario home prices are fairly valued. Despite a healthy appreciation in home prices in Ontario between 2001-2009 we have avoided the huge run ups (and drops) in prices seen in Alberta and British Columbia.
Ontario’s housing supply appears to be inline or undersupplied versus the demand.
The unemployment rate in Ontario rose sharply as a result of the US economic collapse. However, it has since started to slowly decline. The unemployment rate currently sits around 8.5%, it averaged around 6.2% during the 36 months of 2006-2008.
Ontario continues to have a net gain in population growth. It is estimated that the population of Ontario will grow between 6% and 10% over the next 21 years. This will have a longer lasting and direct impact on both the demand for housing as well as the economic activity in the area.
Improving consumer confidence and record low interest rates are bound to have a positive impact on the spring 2010 housing market. The spring housing market may even be exaggerated by the Bank of Canada’s signalling of their intention to raise interest rates in June and the introduction of the HST on new home purchases in July.
Where prices go beyond the summer of 2010 will really depend on how much and how quickly the bank of Canada intends on raising rates.
For more information on buying or selling real estate in Burlington, Hamilton, Oakville, or Toronto Ontario, or if you have questions about current market trends, mortgages or interest rate information, please visit the Sean Kavanagh Real Estate Resource Centre at www.seankavanagh.ca I'd be happy to answer any questions to accommodate all of your real estate needs. Follow me on TWITTER or FACEBOOK! You can also contact me at 905-220-9198.
I look forward to hearing from you!
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Source - USPRWire