Canadian housing market calming: BMO

The Canadian housing market is calming rather than crashing, as the impact of tougher mortgage rules and cooling credit is partly offset by the supportive influence of low interest rates and continued income growth, according to a new report from BMO Economics.

Read: Canadian housing continues to cool

“House prices have hit record highs in most regions across Canada, though the rate of appreciation has slowed,” said Sal Guatieri, senior economist, BMO Capital Markets.

“Resale markets are largely balanced, though buyers have gained leverage in some provinces, including Quebec and British Columbia. Steadier prices are expected in the year ahead amid decent job growth. A benign outlook for rates and income should support affordability this year, weighing towards relatively steady sales and prices in most regions.”

Guatieri noted Toronto house prices, though slowing, hit a record high in April; gains in the detached market more than offset slightly lower condo values. Alberta enjoyed decent price gains, while Vancouver’s prices have declined moderately.

Read: Condos drag down housing market

“Nationwide, housing starts have adjusted to the reduced demand, returning to household formation rates,” Guatieri added. “Meantime, Toronto continues to build up rather than out to meet supportive demographic demand.”

Nearly half of Canadian homeowners (48%) intend to buy a property in the next five years — mostly unchanged from fall 2012 — signaling a high level of confidence in Canada’s housing market is continuing into 2013.

Read: Housing affordability not a problem for most families

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.