Housing market forecast: moderate pace of activity
The Canadian housing market is in transition to a more moderate and sustainable pace ofactivity, according to the latest Canadian home resale market forecast update released by RBC Economics Research on July 21, 2011. This follows a period of exceptional growth during the better part of the last decade.
This transition has been punctuated by global events (recession and financial crisis) and policy changes (sharp drop in interest rates, three rounds of mortgage lending rule modifications, and the introduction of the HST in Ontario and British Columbia) that produced tremendous volatility since 2008.
“Our view is that less turbulent economic and policy environments will support a smoother process going forward,” said Robert Hogue, senior economist, RBC. “The main policy shift will be one toward progressively higher interest rates, which will cool demand but not deep-freeze it.” Resales in Canada are expected to grow by 0.9% in 2011 and remain unchanged in 2012; and home prices to increase by 4.4% and 0.4%, respectively. Such results would mark a significant slowing relative to the performance during the 2002-2008 period.
What does that mean for you?
With uncertainty as to when interest rates are likely to rise there is now even more reason to get a mortgage pre-approval with an RBC Mortgage Specialist. A pre-approval provided by an RBC Mortgage Specialist, will guarantee the rates on fixed term mortgages for up to 120 days. Not only will you know how much your clients can really afford, but they’ll have our guarantee that if the rates increase in the next 120 days their rate will not.
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