Mixed performance in global housing market

Global housing activity in early 2013 was mixed, mirroring the uneven pace of economic growth, finds Scotiabank. In the majority of national markets, housing conditions are fairly steady and average home prices relatively flat.

Read: Steady gains in housing market

But in many areas, including Asia, Latin America and the U.S., home prices are again accelerating, supported by relatively stronger domestic economic conditions. In others, namely the struggling nations of southern Europe, deep price declines are continuing.

“Highly stimulative monetary policy conditions, reinforced by additional easing measures internationally through the spring, should provide support to the interest-sensitive housing sector,” says Adrienne Warren, senior economist at Scotiabank. “However a faster and more synchronized improvement is contingent on a strengthening in global economic activity, labour markets and consumer confidence.”

Read: Housing bubble won’t burst, say experts According to the report, Canadian inflation-adjusted home prices were unchanged year-over-year in the first quarter. Housing demand remains healthy, but has cooled amid tougher mortgage refinancing rules and slowing employment and income growth. The report forecasts further downside risk to sales and prices.

Scotiabank’s report also examines the rebalancing underway in Toronto’s housing market in the wake of affordability pressures, inventory build, changes to mortgage insurance rules and more cautious lending policies.

Read: Canada vulnerable to global risks

“Sales and construction have already shifted notably lower in Toronto, and prices are beginning to level out,” says Warren. “We expect this adjustment process to continue into mid-decade, with downside risk to prices, particularly in the condominium market where supply additions are expected to outpace underlying demand.”

Also read:

Condo demand mixed in big cities: BMO

Canadian housing market calming

Low-rise home sales continue to slide

Staff

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