Canadian Housing Market: Endangered Or Not?

Introduction

Economists can’t seem to pinpoint exactly whether the Canadian Housing Market is in danger or not. Most updated reports coming along are confusing its readers with double-edged statements of the current situation.

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One would think that it’s getting better with the monthly climb of sales, but then again when you take a look at the annual report, a much more dim picture reveals itself, since sales have been steadily dropping for ages.

Statistics & Thoughts on the Housing Market

Several economists have paraded the idea that on the whole, the volatile housing market is starting to stabilize, with various fluctuations in between regional markets. This makes the Housing Market a smaller worry for policymakers, especially with the downslope of household borrowing.

Statistical Canadian Data also confirms this, especially about the household debt being leveled off. Basically what this means is that everything has simmered down now, with the housing market not being either too drastic or stagnant. But then again, you have other economists disagreeing with the state such as previously portrayed. They firmly believe that the Canadian housing market is at an imminent risk of price correction. This is mainly due to the fact that the Canadian housing market is one of the most overvalued in the world with a significantly bigger percentage than the rest of the world. The main signal for this is that if the prices rise too much and too fast from their corresponding historical value, a correction is often times expected during the following few years to come. Basically, if the value is too big, usually in a short amount of time, price declines should be expected. Many wells viewed researchers back this up with field study. Even though sales have soared a bit over the few months in between, generally prices are dropping if counted over the years. This is not even mentioning the huge regional differences from price to price. Some have a steeper annual decline than others, but most are in agreement that it is going down slowly. Most buyers are going to look at what is happening locally or at least nearby to where they are living instead of the whole picture. This, of course, is what matters to them most. Of course, it is in a good amount of faith to see a correction in one part of geological land and not in others. So, in turn, this makes sense, but we should not be dismissing the overall picture just yet as it shows other things as well. Because of this difference, some places simply feel like they are masking the value of its structure compared to others. This could easily fool buyers into believing that everything is as it was.

Conclusion

Even though we will usually look at our local market and not have a wider need to dig through various statistics that don’t really concern us, it is often wise to check the entire playing field before making a decision.