The Real Estate Encyclopedia
Our Brothers North of the Border
Category - Real Estate Information Sources - Real Estate Articles

The Canadian real estate market has been its own man for a long time now, bucking the trend to not follow the U.S. real estate market in its downward spiral.

After almost a decade of continuous growth most would even agree that home prices in Canada are not even substantially overvalued. At the same time Canada's new homes market is also not overbuilt as it is in many places in the U.S. Overall the underlying domestic housing fundamentals for the Canadian real estate market remain healthy.

The single biggest reason you ask? Well, the thanks should go to the Canadian lenders that have maintained relatively conservative loan qualifying criteria during recent years and although they introduced some forms of interest-only mortgages, no down and 40 year ARMs, they cleverly stayed away from ridiculously low rates to unqualified and unverifiable buyers.

So while documented stats reflects that Canada's housing market has slowed down – resales  have now fallen for four consecutive months and are running about 15% below last summer's historic peaks.  The average home resale price during the first quarter of 2008 also registered its first quarterly decline in seven years and the number of unsold homes are trending higher - the number of unabsorbed units, including condominiums, remains well below prior cyclical peaks.

Similar to the U.S,, certain markets are more overheated than others. In the U.S. it’s places like Miami, Detroit, Las Vegas and Southern California while in Canada the cooling is most visible in the hottest urban housing markets in recent years; namely Calgary and Edmonton. On the flipside, areas such as Regina and Saskatoon are currently in the strongest sellers' position nationally, supported by good affordability, rising population inflows and tight supply.
Three years ago the U.S. was debating between a “soft landing” or a “crash landing”. Well the subprime market clearly drove the U.S. into the latter. Canada's last two major housing booms in the 1970s and 1980s were both followed by price stagnation rather than a collapse - so, all indications are that Canada will be enjoying the benefits of the better alternative.

Canada, Oh, Canada!



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Real Estate Information Sources - Real Estate Articles
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