Canada housing market-Is it heading for a bubble?
Canada, 11th May: Canada housing prices have continued to witness a rising trend thus adding to the likelihood of a housing bubble in the near future.
Canada’s recent housing data suggests the market is becoming too hot making the way for a possible housing bubble. Let’s see how and to what extent is it true—
Time to clear debts–Financial analysts and policy makers feel it’s the right time for consumers to clear off all debts. Some say the market is, undoubtedly, heading for a housing bubble while others think chances of a crash in the market are not ruled out.
Increased home prices in Canada–As per the latest official figures unveiled by Statistics Canada, prices of new homes in Canada went up by 0.3 percent in March from the previous month this year. This was a 12th consecutive increase. These prices show a rise of 2.6 percent as compared to what they were a year ago.
The increase in Canada house prices surged ahead of the predictions by operators although to a marginal extent. Emerging on top of the list in this housing price rise for March were Toronto, Oshawa, Edmonton and Calgary respectively.
The reasons behind housing price rise in Oshawa and Toronto were higher demand and good market conditions. Winnipeg, with an increase of 0.7 percent in March(from February), registered biggest monthly price rise. It was followed by Toronto and Oshawa with both sharing a price rise of +0.6 percent.
However, Victoria (-0.7 percent)and Vancouver showed decrease in housing prices due to tough competitive markets.
Canada housing—Bubble or no bubble—Whether or not Canada’s housing market heading for a bubble trouble is not known yet. That because signs of any imminent bubble in a housing market are not clear. So, it becomes known only when the bubble goes ‘pop’, says Finn Poschmann from CD Howe Institute.
<blockquote>According to CHMC (Canadian Housing and Mortgage Corporation) 2011 annual report, signs of a bubble in Canada real estate are missing. Any fears of Canada housing market heading for a bubble are overrated, quips Chief Executive of Royal Bank of Canada, Gordon Nixon. </blockquote>
No-bubble-no-trouble in Canada housing market—
Following reasons highlighted by CMHC report refute any bubble in Canada housing–
- Canada’s houses have increased and so has its population. Increasing population needs more houses to live in;
- Better jobs for Canadians are increasing their affordability for mortgages. Increasing emloymetn will offer support to Canada housing sector;
- Increased incomes of Canadians due to economic recovery along with accompanied improvisations in Canada labor market will support Canada housing.