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2011 housing market beats the odds

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guest | 14 Dec 2011, 06:58 PM Agree 0

Economists are now crediting the debt crisis for keeping interest rates low in Canada, helping stabilize the housing market.
That represents an about-face.
The Canadian Real Estate Association (CREA) estimated a year ago that real estate values would decline 1.3% from their 2010 average to $326,000 by the end of 2011. Even a more optimistic report in January from Royal LePage predicted an overall gain of 3% in 2011 for the national average price, likely to fall well short of the actual result by the end of this year.
As it turns out, a much different picture has played out, where demand has remained strong and interest rates low, pushing prices beyond expectations. By October, the national average has already reached $362,899, according to the CREA, which is a 5.5% increase over the same time in 2010.
Canadian Business noted that Gregory Klump, CREA’s chief economist, originally predicted 2011 to be “boring” in his report. He’s since changed that description this year, using “volatile” in looking back at 2011.
Expectations are low again for 2012, however. CREA predicted Canada’s national home price to remain flat at $362,700, including a 1.8% decline in British Columbia.
David Madani, economist with Capital Economics. predicted at the start of 2011 a collapse in prices by 25%-35%. This week he predicted interest rates would go even lower for Canadians next year, from 1.00% to 0.50%.
While it might not have happened exactly as predicted, Madani told Canadian Business he’s even less confident in housing values after the strength of 2011.
“We’re even more nervous one year later about the Canadian housing market,” he said.
  • stan | 14 Dec 2011, 10:18 PM Agree 0
    I am always amazed with analysts who like to wiegh in on business sectors they know nothing about.
  • stan | 14 Dec 2011, 11:18 PM Agree 0
    I am always amazed with analysts who like to wiegh in on business sectors they know nothing about.
  • Vancouver Radio Realtor | 19 Dec 2011, 09:31 AM Agree 0
    With all respect to the Economists who spent their University time, got their degree(s) but what the heck do they know! They admit only 3 out of 10 times they are right but since people are still interested in what they say, that's why they still have a job.

    I wonder how many Economists travel around the world & understand what is going on around the globe. I ain't economists but I have been telling my clients n share my low interest rates thoughts on my weekly radio show for years even b4 2008. David Madani should think twice b4 he makes any more prediction...
  • Vancouver Radio Realtor | 19 Dec 2011, 10:31 AM Agree 0
    With all respect to the Economists who spent their University time, got their degree(s) but what the heck do they know! They admit only 3 out of 10 times they are right but since people are still interested in what they say, that's why they still have a job.

    I wonder how many Economists travel around the world & understand what is going on around the globe. I ain't economists but I have been telling my clients n share my low interest rates thoughts on my weekly radio show for years even b4 2008. David Madani should think twice b4 he makes any more prediction...
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