Saturday, 28 July 2012
Canadian Property Market Still Improving
Many people are aware of, and criticise, the fact that there is scope for a ‘bubble’ in Canada, as prices will continue to grow. Another record price peak was reached in June despite a decreased rate (according to Teranet-National Bank Composite’s most recent House Price Index)
The index, in which single family homes are monitored for any change in value of repeated sales, demonstrated that for June there was a 1.2% general increase in price compared to May. Compare this to the previous year and the index has climbed up 5.4% (Montreal showing a 4.4% increase) The only negative being that for 7 consecutive months, the year on year price has continued to grow at a decreased rate.
Canadian micro strategist, from TD Securities, Mazen Issa, has said that “The 11-city composite index has steadily decelerated on a year-ago basis since late 2011. We would have seen a sharper deceleration in the index if it were not for the Toronto market, which holds the greatest weight in the index.”
As you may expect, there is continued speculation on where this growth in Canadian property prices will lead (especially when considering in combination with “overbuilding of |condos in Toronto”): A steady cooling or a dramatic crash?
Canada’s largest mortgage lender, The Royal Bank of Canada, is expecting a steady decline, rather than a crash, in Toronto’s property market, since supply continues to appear online.Capital Economics, however, disagree with the proposed cooling. David Madani, one of their economists had this to say “Admittedly, house prices haven’t actually started to fall more generally, which would seem to support the view that Canada’s housing market is enjoying a soft landing.. .we think a housing correction over the longer term is inevitable and still stand by our earlier view of house prices declining by 25 per cent.”
A parallel to this story is running on the other side of the world. In New Zealand, property value is continually powering on despite the global recession. If you are planning on investing in property or taking out a mortgage overseas, clearly it would be wise to do so in a market that is proven to be prosperous such as Canada or New Zealand . If you have any questions or concerns about overseas property or mortgages get in touch with Conti - the UK’s leading overseas mortgage specialist.
(Image by Tobias Alt, Tobi 87 (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0-2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons)